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On the Economies of Energy Labels in the Housing Market Dirk Brounen and Nils Kok 3 December 2009

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 ensure that, when buildings are constructed, sold or rented out, an energy performance

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On the Economies of Energy Labels in the Housing Market Dirk Brounen and Nils Kok 3 December 2009

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  1. On the Economies of Energy Labels in the Housing Market Dirk Brounen and Nils Kok 3 December 2009

  2. Energy Performance of Buildings Directive (January 2003) “Member states shall ensure that, when buildings are constructed, sold or rented out, an energy performance certificate is made available by the owner to the prospective buyer or tenant”

  3. Our laboratory Population: 16.5 mln Homes: 7.2 mln Ownership: 55% Temperature: 50 ºF (35 ºF– 68 ºF) Price: €230.000 Net mortgage: €800/month Gas bill: €105/month Electricity bill: €53/month

  4. Our data Sample: 175,875 sales Period: Jan08 – Sep09 Housing data dwelling characteristics NVM age, size, type, location, maintenance level, insulation, heating EPC data certification SenterNovem category (A-G) Location data neighborhood characteristics CBS density, home values, time-on-the market Politics election voting Ministry IA 6 digit postal code results

  5. Summary statistics (table 1)

  6. Summary statistics (table 1)

  7. The questions • We analyze two things: • The adoption process • Who adopts? • At which pace? • Why? • The effects of labels on the sale process • On speed of sale • On pricing • Why?

  8. The adoption process / rates

  9. The adoption process / logit (table 2)

  10. The adoption process / logit (table 2)

  11. The adoption process / logit (table 2)

  12. The adoption process / conclusions • Adoption rates are: • Falling over time • Driven by: • dwelling type • dwelling age • dwelling size • interior maintenance • location (low density, high values) • ideals (voting green) • and not by: heating system or insulation

  13. The questions • We analyze two things: • The adoption process • Who adopts? • At which pace? • Why? • The effects of labels on the sale process • On speed of sale • On pricing • Why?

  14. The effects/ price (table 4) ……….

  15. The effects/ price (appendix B)

  16. The questions, one more thing… • We will analyze a third thing soon: • The adoption process • Who adopts? • At which pace? • Why? • The effects of labels on the sale process • On speed of sale • On pricing • Why? • The real energy usage (gas and electricity) for all individual dwellings • What 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?

  17. Energy use/ stats

  18. Conclusions We find that energy labels are adopted: slow by high-end owners of relatively young homes in competitive markets that are also more likely to vote green during elections We also find that the energy label does not effect the speed of sale but green labeled homes are sold at a premium of 2.45% also when controlling for quality The link to real energy use is next… dbrounen@rsm.nl

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