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The Price Effect of Building Energy Ratings in the Dublin Residential Market

Author

Listed:
  • Ronan C. Lyons

    (Department of Economics, Trinity College Dublin; Spatial Economics Research Centre, London School of Economics)

  • Sean Lyons

    (Economic & Social Research Institute (Dublin); Department of Economics, Trinity College Dublin)

  • Sarah Stanley

Abstract

This paper is an empirical study of the relationship between the energy performance rating of residential homes in the Dublin market between 2009 and 2014 and their market prices, controlling for building type, size, age, and location. Initial results suggest that energy efficiency has a significant, positive relationship with list price. A 50-point improvement in the Energy Performance Indicator (kWh/m2/yr) is associated with a 1.5% higher list price. Alternatively, using the Building Energy Rating metric, a one-point improvement in the 15-point scale from G to A1 yields a list price increase of 1%. This mirrors findings for efficiency price premiums on a nationwide basis from Hyland et al. (2013). We also find that it is important to include controls for the age of the dwelling to avoid biased energy efficiency estimates in the hedonic model.

Suggested Citation

  • Ronan C. Lyons & Sean Lyons & Sarah Stanley, 2015. "The Price Effect of Building Energy Ratings in the Dublin Residential Market," Trinity Economics Papers tep0415, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep0415
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    File URL: https://www.tcd.ie/Economics/TEP/2015/TEP0415.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Collins, Matthew & Curtis, John, 2018. "Bunching of residential building energy performance certificates at threshold values," Applied Energy, Elsevier, vol. 211(C), pages 662-676.
    2. Florian Fizaine & Pierre Voye & Catherine Baumont, 2018. "Does the Literature Support a High Willingness to Pay for Green Label Buildings? An Answer with Treatment of Publication Bias," Revue d'économie politique, Dalloz, vol. 128(5), pages 1013-1046.
    3. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Policy Papers 2018.04, FAERE - French Association of Environmental and Resource Economists.
    4. Maria-Francisca Cespedes-Lopez & Raul-Tomas Mora-Garcia & V. Raul Perez-Sanchez & Juan-Carlos Perez-Sanchez, 2019. "Meta-Analysis of Price Premiums in Housing with Energy Performance Certificates (EPC)," Sustainability, MDPI, vol. 11(22), pages 1-59, November.
    5. Lu Zhang & Lennart Stangenberg & Sjors van Wickeren, 2020. "The information value of energy labels: Evidence from the Dutch residential housing market," CPB Discussion Paper 413, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Sean Hay Kim & Jungmin Nam, 2020. "Can Both the Economic Value and Energy Performance of Small- and Mid-Sized Buildings Be Satisfied? Development of a Design Expert System in the Context of Korea," Sustainability, MDPI, vol. 12(12), pages 1-29, June.
    7. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    8. James Carroll & Eleanor Denny & Ronan C. Lyons, 2020. "Better energy cost information changes household property investment decisions: Evidence from a nationwide experiment," Trinity Economics Papers tep1520, Trinity College Dublin, Department of Economics.
    9. 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.
    10. Rui Evangelista & Esmeralda A. Ramalho & João Andrade e Silva, 2019. "On the use of Hedonic Regression Models to Measure the Effect of Energy Efficiency on Residential Property Transaction Prices: Evidence for Portugal and Selected Data Issues," Working Papers REM 2019/64, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    11. Collins, Matthew & Curtis, John, 2018. "Willingness-to-pay and free-riding in a national energy efficiency retrofit grant scheme," Energy Policy, Elsevier, vol. 118(C), pages 211-220.
    12. Florian Fizaine Fizaine & Pierre Voye & Catherine Baumont, 2018. "Les études hédoniques soutiennent-elles une valeur verte élevée dans le bâtiment ? Une réponse par la méta-analyse," Post-Print halshs-01957447, HAL.
    13. Paolo Bragolusi & Chiara D’Alpaos, 2021. "The Willingness to Pay for Residential PV Plants in Italy: A Discrete Choice Experiment," Sustainability, MDPI, vol. 13(19), pages 1-13, September.

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    More about this item

    Keywords

    domestic building energy ratings; hedonic valuation; Ireland;
    All these keywords.

    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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