Are tenants willing to pay for energy efficiency? Evidence from a small-scale spatial analysis in Germany

Steven März, Ines Stelk and Franziska Stelzer

Energy Policy, 2022, vol. 161, issue C

Abstract: To address climate change, the decarbonisation of Germany’s existing building stock urgently needs to be prioritised. However, the rate and depth of refurbishment has lagged behind official targets for years. This is a particular problem in the rental sector, where the costs and benefits of energy efficiency measures tend to be unevenly distributed between landlords and tenants (the so-called ‘landlord-tenant dilemma’). Within the context of the current policy landscape, investments in energy efficiency consequently make most sense for landlords if the upfront costs can be refinanced via increased rental income or reduced vacant periods. This paper seeks to investigate the validity of this statement at city level by using a large dataset from one of Germany’s main internet property platforms to examine how the willingness of tenants to pay for energy efficiency varies across residential locations in the city of Wuppertal.

Keywords: Energy efficiency; Willingness-to-pay (WTP); Hedonic regression; Spatial regression; Rental markets; Split incentive (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:161:y:2022:i:c:s0301421521006194

DOI: 10.1016/j.enpol.2021.112753

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