on the economies of energy labels in the housing market dirk brounen and nils kok 3 december 2009
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On the Economies of Energy Labels in the Housing Market
Dirk Brounen and Nils Kok
3 December 2009
Energy Performance of Buildings Directive (January 2003)
“Member states shall ensurethat, when buildings are constructed, sold or rented out, an energy performancecertificate is made available by the owner to the prospective buyer or tenant”
Our laboratory
Population: 16.5 mlnHomes: 7.2 mlnOwnership: 55%Temperature: 50 ºF
(35 ºF– 68 ºF)
Price: €230.000Net mortgage: €800/monthGas bill: €105/monthElectricity bill: €53/month
Our data
Sample: 175,875 salesPeriod: Jan08 – Sep09
Housing data dwelling characteristics NVM age, size, type, location, maintenance level, insulation, heating
EPC data certificationSenterNovem category (A-G)
Location data neighborhood characteristicsCBS density, home values, time-on-the market
Politics election votingMinistry IA 6 digit postal code results
Summary statistics (table 1)
Summary statistics (table 1)
The questions
We analyze two things:
The adoption processWho adopts? At which pace? Why?
The effects of labels on the sale processOn speed of saleOn pricingWhy?
The adoption process / rates
0%
5%
10%
15%
20%
25%
30%
0
2000
4000
6000
8000
10000
12000
14000
16000
Number of transactions (LHS)Market share labelled dwellings (RHS)
The adoption process / logit (table 2)
The adoption process / logit (table 2)
The adoption process / logit (table 2)
The adoption process / conclusions
Adoption rates are:
Falling over time
Driven by:dwelling typedwelling agedwelling sizeinterior maintenancelocation (low density, high values)ideals (voting green)
and not by: heating system or insulation
The questions
We analyze two things:
The adoption processWho adopts? At which pace? Why?
The effects of labels on the sale processOn speed of saleOn pricingWhy?
The effects/ price (table 4)
……….
The effects/ price (appendix B)
The questions, one more thing…
We will analyze a third thing soon:
The adoption processWho adopts? At which pace? Why?
The effects of labels on the sale processOn speed of saleOn pricingWhy?
The real energy usage (gas and electricity) for all individual dwellingsWhat drives energy use?How strong is the link between EPC and usage?Is energy use capitalized? (for labeled versus non-labeled dwellings)Does energy usage drive adoption rates?
Energy use/ stats
Conclusions
We find that energy labels are adopted:slowby high-end owners of relatively young homes in competitive marketsthat are also more likely to vote green during elections
We also find that the energy label does not effect the speed of salebut green labeled homes are sold at a premium of 2.45%also when controlling for quality
The link to real energy use is next…