Distributional Properties Of Cost Allocation Rules In Multi-Family Energy Retrofits: Evidence From 4 Million Apartments

Jakub Sokołowski and Stefan Bouzarovski
Authors registered in the RePEc Author Service: Jakub Sokolowski

No 04/2026, IBS Working Papers from Instytut Badan Strukturalnych

Abstract: Collective decisions to retrofit multi-family residential buildings require co-owners to agree on how the total cost is divided among dwellings, yet the distributional properties of alternative allocation rules have been insufficiently investigated at scale. Using harmonised Energy Performance Certificate (EPC) microdata covering over 4 million apartments in almost 450,000 buildings across Poland, England and Wales, and the Netherlands, we simulate five allocation rules: area-proportional, progressive-area, emissions-proportional, inefficiency-proportional, and Shapley-value allocation. For each building, we evaluate the resulting cost-share distributions using within-building inequality indices, size-progressivity measures, and cooperative-game-theoretic stability criteria. We find that performance-based rules produce within-building Gini coefficients 2 to 11 times higher than area-proportional allocation, with systematic variation across national building stocks. These rules are also less proportional in terms of dwelling size, assigning larger cost shares to smaller dwellings than their floor-area shares warrant. For retrofit governance in multi-owner buildings, allocation design should therefore be treated as a central component of policy implementation rather than a technical-administrative choice.

Keywords: multi-family housing; energy-efficiency retrofits; cost allocation; Shapley value; cooperative game theory; Energy Performance Certificates (search for similar items in EconPapers)
JEL-codes: C71 D63 H23 Q48 Q52 R31 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2026-06
New Economics Papers: this item is included in nep-ene and nep-inv
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