House price externalities of a Minimum Energy Effciency Standard (MEES)

Lory Barile, Benjamin Guin and Eleni Sandi
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Lory Barile: Department of Economics, University of Warwick
Benjamin Guin: Bank of England
Eleni Sandi: Department of Economics, University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Environmental policies can inadvertently increase transition risks, negatively impacting property prices. The Minimum Energy Effciency Standard (MEES), designed to enhance energy effciency in rental properties, may devalue sub-standard properties and can affect neighboring above-standard ones. Our study documents this spatial externality using a dataset that combines property transaction variables with energy effciency data at the postcode level. We construct a concentration measure for sub-standard properties and apply it to both aggregate and property- level analyses using a difference-in-differences approach. Our findings indicate that MEES comes with spatial externality on properties unaffected by the policy, with a 3.2% price decline in neighborhoods with higher concentrations of sub-standard housing.

Keywords: Environmental policy; Spatial externality; House prices JEL Codes: Q01; Q49; Q58 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1562

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