Residential Heating Method and Housing Prices: Results of an Empirical Analysis in South Korea

Chang-Soo Noh, Min-Ki Hyun and Seung-Hoon Yoo ()
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Chang-Soo Noh: Department of Future Energy Convergence, Graduate School, Seoul National University of Science & Technology, Seoul 01811, Republic of Korea
Min-Ki Hyun: Department of Energy Policy, Graduate School of National Defense Convergence Science, Seoul National University of Science & Technology, Seoul 01811, Republic of Korea
Seung-Hoon Yoo: Department of Future Energy Convergence, College of Creativity and Convergence Studies, Seoul National University of Science & Technology, Seoul 01811, Republic of Korea

Energies, 2025, vol. 18, issue 14, 1-18

Abstract: This study empirically delves into whether residential heating methods significantly affect apartment prices in Uiwang City, a suburban city near the Seoul Metropolitan area, South Korea. Using data from 1256 apartment sales, where both district heating systems (DHSs) and individual heating systems (IHSs) coexist, a hedonic price equation was estimated to analyze the impact of the heating method choices on housing values. Various housing attributes, including physical, locational, and environmental factors, were controlled, and multiple regression models were compared to identify the best-performing specification. The results show that apartments equipped with a DHS are priced, on average, KRW 92 million (USD 72 thousand) higher than those with an IHS. The price difference corresponds to KRW 849 thousand (USD 665) per m 2 and possesses the statistical significance at the 5% level. Moreover, it is quite meaningful, representing roughly 11.2% of the price of an average apartment. These findings suggest that the use of DHS has a positive effect on apartment prices that reflect consumers’ preferences, beyond its advantages in stable heat supply and energy cost savings. This article provides empirical evidence that DHS can serve as an important urban infrastructure contributing to asset value enhancement. Although this study is based on a specific geographic area and caution must be exercised in generalizing its findings, it reports the interesting finding that residential heating method significantly affects housing prices.

Keywords: district heating system; residential heating method; housing price; hedonic price model (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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