Energy Performance Certificates and Rental Prices of Residential Housing in Norway -What is the impact of energy labeling on Norwegian rental prices?

Aras Kj and Ole Jakob Sønstebø

ERES from European Real Estate Society (ERES)

Abstract: Energy efficiency in the residential housing market can play an important role in the reduction of global carbon emissions. Energy Performance Certificates (EPCs) provide actors with information that can be used to make better-informed decisions and integrate energy efficiency into their decision making process. In addition, the information from EPCs should provide an incentive for actors in this market to invest in energy efficiency, as it can be assumed that improving the energy performance of a building may lead to higher transaction prices and rents on the market. This paper reports the first Norwegian evidence on the economic implication of EPCs on rental market prices. Applying the multilevel estimation approach to investigate the relation between energy labeling and rental prices in Norway for 860 000 observations, we find strong evidence of a positive price premium. Moreover, the premium is higher for bigger cities than in rural areas.

Keywords: energy performance certificates; Environmental regulation; Housing rental prices; Information and decisions; Real Estate Economics (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2018-01-01
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2018_125

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