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House price externalities of a Minimum Energy Effciency Standard (MEES)

Author

Listed:
  • Barile, Lory

    (Department of Economics, University of Warwick)

  • Guin, Benjamin

    (Bank of England)

  • Sandi, Eleni

    (Department of Economics, University of Warwick)

Abstract

Environmental policies can inadvertently increase transition risks, negatively impacting property prices. The Minimum Energy Effciency Standard (MEES), designed to enhance energy effciency in rental properties, may devalue sub-standard properties and can affect neighboring above-standard ones. Our study documents this spatial externality using a dataset that combines property transaction variables with energy effciency data at the postcode level. We construct a concentration measure for sub-standard properties and apply it to both aggregate and property- level analyses using a difference-in-differences approach. Our findings indicate that MEES comes with spatial externality on properties unaffected by the policy, with a 3.2% price decline in neighborhoods with higher concentrations of sub-standard housing.

Suggested Citation

  • Barile, Lory & Guin, Benjamin & Sandi, Eleni, 2025. "House price externalities of a Minimum Energy Effciency Standard (MEES)," The Warwick Economics Research Paper Series (TWERPS) 1562, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1562
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2025/twerp_1562-_barile.pdf
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    References listed on IDEAS

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    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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