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On the Quality and Impact of Residential Energy Performance Certificates

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  • Hårsman, Björn

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Daghbashyan, Zara

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Chaudhary, Parth

    () (Department of Energy Science and Engineering, Indian Institute of Technology, Mumbai, India)

Abstract

This paper addresses quality and impact issues concerning Energy Performance Certificates (EPC) by means of a dataset based upon the Swedish EPCs for single-family houses. Assuming that the quality of the certificates plays an important role for their impact, we examine to what extent various characteristics of the firms and experts issuing the certificates are influencing their assessments of energy consumption and energy conservation. Exploiting the information on biased assessments, we also investigate the relationship between the transaction price of a house and its EPC label. Doing so, we distinguish the attributes that can be observed by visiting the house and those that a buyer only can inform herself about through the EPC. Applying regression analyses we find that firm and expert characteristics matter quite a lot implying that the EPC-quality could be improved considerably by increasing the inter-rater reliability. The results also show that the price impact of the energy label is related to information that the buyers can obtain by visiting the house rather than to information uniquely provided by the EPCs. Hence, the EPCs per se are unlikely to stimulate energy conservation through the price mechanism.

Suggested Citation

  • Hårsman, Björn & Daghbashyan, Zara & Chaudhary, Parth, 2016. "On the Quality and Impact of Residential Energy Performance Certificates," Working Paper Series in Economics and Institutions of Innovation 429, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0429
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    File URL: https://static.sys.kth.se/itm/wp/cesis/cesiswp429.pdf
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    References listed on IDEAS

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    1. Fuerst, Franz & McAllister, Pat & Nanda, Anupam & Wyatt, Pete, 2016. "Energy performance ratings and house prices in Wales: An empirical study," Energy Policy, Elsevier, vol. 92(C), pages 20-33.
    2. Mandell, Svante & Wilhelmsson, Mats, 2010. "Willingness to pay for sustainable housing," Working Papers 2010:6, Swedish National Road & Transport Research Institute (VTI).
    3. Kahn, Matthew E. & Kok, Nils, 2014. "The capitalization of green labels in the California housing market," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 25-34.
    4. Murphy, Lorraine, 2014. "The influence of the Energy Performance Certificate: The Dutch case," Energy Policy, Elsevier, vol. 67(C), pages 664-672.
    5. Majcen, D. & Itard, L.C.M. & Visscher, H., 2013. "Theoretical vs. actual energy consumption of labelled dwellings in the Netherlands: Discrepancies and policy implications," Energy Policy, Elsevier, vol. 54(C), pages 125-136.
    6. Fuerst, Franz & McAllister, Patrick & Nanda, Anupam & Wyatt, Peter, 2015. "Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England," Energy Economics, Elsevier, vol. 48(C), pages 145-156.
    7. Amecke, Hermann, 2012. "The impact of energy performance certificates: A survey of German home owners," Energy Policy, Elsevier, vol. 46(C), pages 4-14.
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    Citations

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    Cited by:

    1. Li, Y. & Kubicki, S. & Guerriero, A. & Rezgui, Y., 2019. "Review of building energy performance certification schemes towards future improvement," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.
    2. Felipe Encinas & Carlos Aguirre & Carlos Marmolejo-Duarte, 2018. "Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market," Sustainability, MDPI, Open Access Journal, vol. 10(1), pages 1-26, January.
    3. Riccardo Camboni & Alberto Corsini & Raffaele Miniaci & Paola Valbonesi, 2020. "Mapping fuel poverty risk at the municipal level: A Small-Scale Analysis of Italian Energy Performance Certificate, Census and Survey data," "Marco Fanno" Working Papers 0252, Dipartimento di Scienze Economiche "Marco Fanno".
    4. Wilhelmsson, Mats, 2019. "Energy Performance certificates and its capitalization in housing values in Sweden," Working Paper Series 19/3, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    5. Wahlström, Marie H., 2016. "Doing good but not that well? A dilemma for energy conserving homeowners," Energy Economics, Elsevier, vol. 60(C), pages 197-205.
    6. Jenny von Platten & Claes Sandels & Kajsa Jörgensson & Viktor Karlsson & Mikael Mangold & Kristina Mjörnell, 2020. "Using Machine Learning to Enrich Building Databases—Methods for Tailored Energy Retrofits," Energies, MDPI, Open Access Journal, vol. 13(10), pages 1-22, May.
    7. Pasichnyi, Oleksii & Wallin, Jörgen & Levihn, Fabian & Shahrokni, Hossein & Kordas, Olga, 2019. "Energy performance certificates — New opportunities for data-enabled urban energy policy instruments?," Energy Policy, Elsevier, vol. 127(C), pages 486-499.
    8. Mats Wilhelmsson, 2019. "Energy Performance Certificates and Its Capitalization in Housing Values in Sweden," Sustainability, MDPI, Open Access Journal, vol. 11(21), pages 1-16, November.
    9. Hardy, A. & Glew, D., 2019. "An analysis of errors in the Energy Performance certificate database," Energy Policy, Elsevier, vol. 129(C), pages 1168-1178.

    More about this item

    Keywords

    Residential energy performance certificates; assessments of energy consumption and conservation; inter-rater reliability; capitalization of energy efficiency; hedonic regression;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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