Evidence of rational market valuations for home energy efficiency
According to this study, residential real estate markets assign to energy-efficient homes an incremental value that reflects the discounted value of annual fuel savings. The capitalization rate used by homeowners was expected to be 4%-10%, reflecting the range of after-tax mortgage interest rates during the 1990s and resulting in an incremental home value of $10 to around $25 for every $1 reduction in annual fuel bills. Regression analysis of American Housing Survey data confirms this hypothesis for national and metropolitan area samples, attached and detached housing, and detached housing subsamples using a specific fuel type as the main heating fuel.
|Date of creation:||Oct 1998|
|Date of revision:|
|Publication status:||Published in The Appraisal Journal 66.4(1998): pp. 401-409|
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- Longstreth, Molly, 1986. "Impact of consumers' personal characteristics on hedonic prices of energy-conserving durables," Energy, Elsevier, vol. 11(9), pages 893-905.
- Laquatra, Joseph, 1986. "Housing market capitalization of thermal integrity," Energy Economics, Elsevier, vol. 8(3), pages 134-138, July.
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