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How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market

Author

Listed:
  • RUI EVANGELISTA
  • JOÃO ANDRADE E SILVA
  • ESMERALDA A. RAMALHO

Abstract

This paper investigates the impact of energy efficiency along the unconditional distribution of residential property prices in Portugal. Using a dataset of more than 256,000 residential property sales from 2009 to 2013, a period that covers an economic depression, unconditional quantile regression analysis reveals that the responsiveness to energy efficiency improvements is different not only as we move from low- to high-priced residential units but also for apartments and houses. While the former show a downward trend in the magnitude of energy efficiency coefficient estimates, the opposite occurs for houses. The latter market segment exhibits clear market discounts at the lowest quantiles of the price distribution, something that is not observable thought conditional mean and quantile regression analysis. Results suggest the existence of a different responsiveness to energy efficiency improvements in the Lisbon region when compared to the rest of the country and that the impact of the Energy Performance Certificate label increases throughout time across all price quantiles. As a by-product of this paper, an unconditional quantile price index shows that the impact of the crisis was not the same across the different market segments, with price decreases being more severe for low- than high-priced properties.

Suggested Citation

  • Rui Evangelista & João Andrade E Silva & Esmeralda A. Ramalho, 2021. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Working Papers REM 2021/0186, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    • Handle: RePEc:ise:remwps:wp01862021
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    References listed on IDEAS

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    More about this item

    Keywords

    energy efficiency; residential property market; hedonic price models; conditional quantile regression; unconditional quantile regression;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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