The Residential Value of Energy Efficient Housing
||The Residential Value of Energy Efficient Housing
||20th Annual European Real Estate Society Conference in Vienna, Austria
||In line with directives from the European Union, member countries have adopted measures aiming to reduce the energy use in the real estate sector. In Sweden, sellers of residential housing have to provide potential buyers with an energy certificate with detailed information on energy performance and consumption. The idea is to make users more aware of their energy consumption and of different ways to reduce it. This paper studies to what extent the energy certificates for single-family house owners in Sweden, introduced in 2009, seem to work in the way expected. More specifically, the following questions are addressed: • What role does preferences and household characteristics play for energy consumption as compared with the energy related attributes of their house? E.g. does energy consumption depend more on technical installations such as heat pumps or is household composition a stronger influencer? • Is there a willingness to pay more for houses with “better” energy performance? How large is this price premium? An econometric approach is used to address the questions. Energy consumption is related to both housing attributes, including energy-related factors, and household characteristics, including income. A hedonic price model is used to analyze implicit prices for the various attributes. A unique feature is the large set of energy-related attributes included in the database (all single-family houses sold in Sweden 2009-2010), which also comprises individual household data. To our knowledge, this is the largest empirical work performed in Sweden on this matter. The results will be compared with those of similar studies. However, the Swedish case is interesting in itself. In Sweden, 3% of the disposable income goes to energy consumption; twice as much as the EU average. Our data represents three different climatic zones. The average annual temperature varies from -5 in the north to 9°C in the south, which is quite unique in an international perspective.Preliminary results show that the energy consumption in a house is partly depending on the building’s characteristics, such as vintage, and partly on the household’s characteristics, such as size and composition. The hedonic model shows that there is a price premium for energy efficient houses.
||Housing, Energy consumption, Hedonic pricing, Energy efficiency, Residential preferences
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||L-1: Real Estate & Urban Economics
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