The Value of Domestic Building Energy Efficiency – Evidence from Ireland

University of Oxford Department of Economics Working Paper No. 614

40 Pages Posted: 29 Jun 2012

See all articles by Marie Hyland

Marie Hyland

World Bank

Ronan C. Lyons

Trinity College Dublin; Spatial Economics Research Centre, LSE

Sean Lyons

Economic and Social Research Institute, Ireland; University of Dublin - Department of Economics

Date Written: June 29, 2012

Abstract

Following the transposition of the EU Energy Performance of Buildings Directive into Irish law, all properties offered for sale or to let in Ireland are obliged to have an energy efficiency rating. This paper analyses the effect of energy efficiency ratings on the sale and rental prices of properties in the Republic of Ireland. Using the Heckman selection technique we model the decision to advertise the energy efficiency rating of a property and the effect of energy efficiency ratings on property values. Our results show that energy efficiency has a positive effect on both the sales and rental prices of properties, and that the effect is significantly stronger in the sales segment of the property market. We also analyse the effect of energy efficiency across different market conditions and we find that the effect of the energy rating is stronger where market conditions are worse.

Keywords: domestic building energy ratings, hedonic valuation, Ireland

JEL Classification: Q51, R31, Q58

Suggested Citation

Hyland, Marie and Lyons, Ronan C. and Lyons, Sean, The Value of Domestic Building Energy Efficiency – Evidence from Ireland (June 29, 2012). University of Oxford Department of Economics Working Paper No. 614. Available at SSRN: https://ssrn.com/abstract=2096296 or http://dx.doi.org/10.2139/ssrn.2096296

Marie Hyland

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Ronan C. Lyons

Trinity College Dublin ( email )

Dublin 2
Ireland

Spatial Economics Research Centre, LSE ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Sean Lyons (Contact Author)

Economic and Social Research Institute, Ireland ( email )

Whitaker Square
Sir John Rogerson's Quay
Dublin 2
United States

University of Dublin - Department of Economics ( email )

Dublin 2
Ireland

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