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The Effect of Energy Efficiency Labeling: Bunching and Prices in the Irish Residential Property Market

Author

Listed:
  • Marie Hyland

    (Department of Economics, Trinity College Dublin and Economic and Social Research Institute (ESRI))

  • Anna Alberini

    (Department of Agricultural and Resource Economics, University of Maryland)

  • Se n Lyons

    (Economic and Social Research Institute (ESRI) and Trinity College Dublin)

Abstract

This paper analyses the system of energy performance certificates in place in Ireland. We find that having a system with discrete energy-efficiency thresholds causes bunching among properties just on the more favorable side of the label cut-off points. This indicates that, in the region around the label thresholds, assessors tend to be extra lenient when evaluating the energy performance of dwellings. We examine possible reasons for this finding, including the market returns to energy efficiency using home sales data from the Irish property price register, and conclude that most likely assessors are trying to ingratiate homeowners to get repeat business. We find evidence of a partial disconnect between sellers' expectations and buyers' valuation of properties labeled as more efficient.

Suggested Citation

  • Marie Hyland & Anna Alberini & Se n Lyons, 2016. "The Effect of Energy Efficiency Labeling: Bunching and Prices in the Irish Residential Property Market," Trinity Economics Papers tep0516, Trinity College Dublin, Department of Economics, revised Aug 2016.
    • Handle: RePEc:tcd:tcduee:tep0516
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    File URL: https://www.tcd.ie/Economics/TEP/2016/TEP0516.pdf
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    References listed on IDEAS

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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. Rodolfo Sejas-Portillo & David Comerford & Mirko Moro & Till Stowasser, 2020. "Limited Attention in the Housing Market: Threshold Effects of Energy-Performance Certificates on Property Prices and Energy-Efficiency Investments," CESifo Working Paper Series 8669, CESifo.
    3. Atasoy, Ayse Tugba, 2020. "Behavioral responses of green builders to discontinuous certification schemes," Resource and Energy Economics, Elsevier, vol. 60(C).
    4. Comerford, David A. & Lange, Ian & Moro, Mirko, 2018. "Proof of concept that requiring energy labels for dwellings can induce retrofitting," Energy Economics, Elsevier, vol. 69(C), pages 204-212.

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    More about this item

    Keywords

    Residential energy efficiency; Energy Performance Certificates; Bunching;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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