Uncovering the price effect of energy performance certificate ratings when controlling for residential quality

Carlos Marmolejo-Duarte and Ai Chen

Renewable and Sustainable Energy Reviews, 2022, vol. 166, issue C

Abstract: In the last decade, market-mediated financial incentives for energy-efficient construction drawn from information policy, including energy performance certificates (EPC), have been intensively researched. While hedonic-based research seems to confirm a positive correlation between residential prices and EPC ratings, opinion-based studies have found that these ratings have a negligible effect on price formation. This paper explores whether insufficient control of non-energy-related architectural attributes in hedonic specifications is responsible for such a divergence. To achieve this, a case-by-case quality assessment is performed for a sample of listed apartments in Barcelona. Then, architectural assessment is introduced as a control in the context of hedonic analysis. The results suggest that EPC ratings show a positive correlation with prices (1.8% price increase for each EPC increment) only when location, general architectural attributes, and basic quality attributes are controlled. Conversely, when architectural quality is thoroughly controlled, such a correlation disappears. However, EPC rating remains as a price driver (7.5% price increase for A/B/C ratings) for the upper tier of apartments in central and affluent zones. Such findings have relevant implications for developers and energy policy.

Keywords: Energy performance certificates; Hedonic prices; Energy efficiency; Residential buildings; Barcelona (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1016/j.rser.2022.112662

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