Price Effect of Building Energy Ratings in the Dublin Residential Market

June 29, 2015
TEP Working Paper No. 0415
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This paper is an empirical study of the relationship between the energy performance rating of residential homes in the Dublin market between 2009 and 2014 and their market prices, controlling for building type, size, age, and location. Initial results suggest that energy efficiency has a significant, positive relationship with list price. A 50-point improvement in the Energy Performance Indicator (kWh/m2/yr) is associated with a 1.5% higher list price. Alternatively, using the Building Energy Rating metric, a one-point improvement in the 15-point scale from G to A1 yields a list price increase of 1%. This mirrors findings for efficiency price premiums on a nationwide basis from Hyland et al. (2013). We also find that it is important to include controls for the age of the dwelling to avoid biased energy efficiency estimates in the hedonic model.