Green Performs Better: Energy Efficiency and Financial Return on Buildings

21 Pages Posted: 7 Dec 2012

See all articles by Marcelo Cajias

Marcelo Cajias

PATRIZIA AG; Universität Regensburg

Daniel Piazolo

THM Technische Hochschule Mittelhessen

Multiple version iconThere are 2 versions of this paper

Date Written: December 6, 2012


This study investigates the effect of energy consumption on the financial performance of residential buildings in a large panel framework. Based on prior European studies regarding the use of energy performance certificates (EPCs), we analyse whether the responsible use of energy leads to a significant price differentiation between 2008 and 2010. Based on the IPD Databank and the German statistical office, our descriptive portfolio results show that energy efficient buildings have an up to 3.15% higher return and 0.76 €/m² higher rent prices than inefficient assets. Furthermore, (un-) conditional regression results provide evidence that one percent decline in energy consumption affects the total return of buildings positively by 0.015%, all else equal. The hedonic results additionally show that one percent energy conservation boosts rent prices by 0.08% and market value by 0.45%. Overall, our study presents alternative methodologies when describing and estimating hedonic data and offers the first empirical evidence of the energy price premium in German residential markets.

Keywords: energy efficiency, sustainability, EPC, German Residential Markets, quantile regression

Suggested Citation

Cajias, Marcelo and Piazolo, Daniel, Green Performs Better: Energy Efficiency and Financial Return on Buildings (December 6, 2012). Available at SSRN: or

Marcelo Cajias (Contact Author)

PATRIZIA AG ( email )

Fuggerstr. 26
Augsburg, 86150
+49 (0) 151 17215198 (Phone)


Universität Regensburg ( email )

93040 Regensburg
D-93040 Regensburg, 93053

Daniel Piazolo

THM Technische Hochschule Mittelhessen ( email )

University of Applied Sciences
Wilhelm-Leuschner-Straße 13
Friedberg, 61169


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