Willingness or Market Power: What Induces Tenants to Pay for Energy Efficient Housing?

Carolin Pommeranz and Bertram Ingolf Steininger

ERES from European Real Estate Society (ERES)

Abstract: In this study, we analyze whether additional payments for energy efficiency are induced by either tenants’ willingness to pay, the market power of landlords, or both. With a German housing dataset from 2011 to 2016, we identify price discrimination for the energy performance certificate using hedonic regressions in a single and double sort setting. Results indicate that a high willingness to pay -– indicated by purchasing power and environmental awareness -– leads to price discrimination effects of 7-8%. These potential extra profits can stimulate investments in energy-based refurbishments by landlords. However, additional market power of landlords –- indicated by housing market conditions –- does not amplify these discrimination effects and is therefore not exploited against tenants.

Keywords: Energy Efficiency; energy performance certificates; green housing; price discrimination (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-com, nep-ene, nep-reg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2018_134

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