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The value of domestic building energy efficiency - evidence from Ireland

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  • Ronan C. Lyons
  • Marie Hyland

Abstract

Following the transposition of the EU Energy Performance of Buildings Directive into Irish law, all properties offered for sale or to let in Ireland are obliged to have an energy efficiency rating. This paper analyses the effect of energy efficiency ratings on the sale and rental prices of properties in the Republic of Ireland. Using the Heckman selection technique we model the decision to advertise the energy efficiency rating of a property and the effect of energy efficiency ratings on property values. Our results show that energy efficiency has a positive effect on both the sales and rental prices of properties, and that the effect is significantly stronger in the sales segment of the property market. We also analyse the effect of energy efficiency across different market conditions and we find that the effect of the energy rating is stronger where market conditions are worse.

Suggested Citation

  • Ronan C. Lyons & Marie Hyland, 2012. "The value of domestic building energy efficiency - evidence from Ireland," Economics Series Working Papers 614, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:614
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    More about this item

    Keywords

    Domestic building energy ratings; Hedonic valuation; Ireland;

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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