On the use of Hedonic Regression Models to Measure the Effect of Energy Efficiency on Residential Property Transaction Prices: Evidence for Portugal and Selected Data Issues

Rui Evangelista, Esmeralda A. Ramalho and João Andrade e Silva

No 2019/64, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: Using a unique dataset containing information of around 256 thousand residential property sales, this paper discloses a clear sales premium for most energy efficient dwellings, which is more pronounced for apartments (13%) than for houses (5 to 6%). Cross-country comparisons support the finding that energy efficiency price premiums are higher in the Portuguese residential market than in central and northern European markets. Results emphasize the relevance of data issues in hedonic regression models. They illustrate how the use of appraisal prices, explanatory variables with measurement errors, and the omission of variables associated with the quality of the properties, may seriously bias energy efficiency partial effect estimates. These findings provide valuable information not only to policy-makers, but also to researchers interested in this area.

Keywords: Portugal; energy efficiency; residential property market; hedonic price models; cross-country comparisons (search for similar items in EconPapers)
JEL-codes: C51 C55 C81 Q41 R21 R30 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://rem.rc.iseg.ulisboa.pt/wps/pdf/REM_WP_064_2019.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp0642019

Access Statistics for this paper

More papers in Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa ISEG - Lisbon School of Economics and Management, REM, R. Miguel Lupi, 20, LISBON, PORTUGAL.
Bibliographic data for series maintained by Sandra Araújo ().