Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany

28 Pages Posted: 7 May 2014

See all articles by Makram El-Shagi

Makram El-Shagi

University of Mannheim

Claus Michelsen

German Institute for Economic Research (DIW)

Sebastian Rosenschon

Halle Institute for Economic Research

Date Written: March 2014

Abstract

The impact of environmental regulation on technology diffusion and innovations is studied using a unique data set of German residential buildings. We analyze how energy efficiency regulations, in terms of minimum standards, affects energy-use in newly constructed buildings and how it induces innovation in the residential-building industry. The data used consists of a large sample of German apartment houses built between 1950 and 2005. Based on this information, we determine their real energy requirements from energy performance certificates and energy billing information. We develop a new measure for regulation intensity and apply a panel-error-correction regression model to energy requirements of low and high quality housing. Our findings suggest that regulation significantly impacts technology adoption in low quality housing. This, in turn, induces improvements in the high quality segment where innovators respond to market signals.

Keywords: environmental regulation, innovation, technology diffusion, residential real estate, energy efficiency

JEL Classification: D2, Q4, R5

Suggested Citation

El-Shagi, Makram and Michelsen, Claus and Rosenschon, Sebastian, Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany (March 2014). DIW Berlin Discussion Paper No. 1371. Available at SSRN: https://ssrn.com/abstract=2432978 or http://dx.doi.org/10.2139/ssrn.2432978

Makram El-Shagi

University of Mannheim ( email )

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

Claus Michelsen (Contact Author)

German Institute for Economic Research (DIW) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Sebastian Rosenschon

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
104
Abstract Views
616
rank
260,527
PlumX Metrics