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Sustainability 2019, 11(2), 372; https://doi.org/10.3390/su11020372

The Uneven Price Impact of Energy Efficiency Ratings on Housing Segments and Implications for Public Policy and Private Markets

Escola Tècnica Superior d’Arquitectura de Barcelona, Centre de Política de Sòl i Valoracions, Universitat Politècnica de Catalunya, 08028 Barcelona, Spain
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Received: 14 November 2018 / Revised: 22 December 2018 / Accepted: 24 December 2018 / Published: 12 January 2019
(This article belongs to the Section Sustainable Urban and Rural Development)
PDF [1566 KB, uploaded 12 January 2019]

Abstract

In the literature, there is extensive, although in some cases inconclusive, evidence on the impact of Energy Performance Certificates (EPC) on housing prices. Nonetheless, the question of whether such an impact is homogenous across residential segments remains highly unexplored. This paper addresses this latter issue utilizing multifamily listing data in metropolitan Barcelona. In doing so, first the entire sample is analyzed using a hedonic model. Second, the sample is split on the basis of a multivariate segmentation. Finally, separated hedonic models are specified again. The results suggest that in general, there is a modest impact of EPC ratings on listing prices, nonetheless it is not homogeneous across housing segments: (1) for the most modern apartments, with state-of-the-art features and active environmental comfort, energy ratings seem to play a null role in the formation of prices; (2) conversely, for the cheapest apartments, apartments boasting the most basic features, and apartments located in low-income areas, the “brown discount” is enormously significant, potentially depreciating the equity of those who have the least resources to carry out an energy retrofit. These results have implications for the assessment of the EPBD and its Spanish transposition, since a very well-intentioned environmental policy could have potentially harmful social repercussions in the absence of corrective measures.
Keywords: EPC impact; residential prices; energy labeling; housing market segments; Barcelona EPC impact; residential prices; energy labeling; housing market segments; Barcelona
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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Marmolejo-Duarte, C.; Chen, A. The Uneven Price Impact of Energy Efficiency Ratings on Housing Segments and Implications for Public Policy and Private Markets. Sustainability 2019, 11, 372.

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