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The value of basic building code insulation

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  • Thorsnes, Paul
  • Bishop, Tim

Abstract

We take advantage of unusually wide variation in thermal insulation in a sample of house sales to estimate the market value of basic code-level insulation. Insulation levels vary across the houses in our sample because standard practice in New Zealand was to build houses with no thermal insulation prior to implementation of insulation standards in 1978, and the extent of insulation retrofits varies across the sample. The estimated premium on an otherwise similar house insulated to code levels exceeds the cost of installation at construction: insulating to basic code levels at construction passes the market test. The premium instead reflects the higher cost of retro-fit installation. We suspect that price, cost, and performance risk have discouraged widespread code-level retro-fits in this market.

Suggested Citation

  • Thorsnes, Paul & Bishop, Tim, 2013. "The value of basic building code insulation," Energy Economics, Elsevier, vol. 37(C), pages 68-81.
    • Handle: RePEc:eee:eneeco:v:37:y:2013:i:c:p:68-81
    DOI: 10.1016/j.eneco.2013.02.001
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    References listed on IDEAS

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    Cited by:

    1. Aydin, Erdal, 2016. "Energy conservation in the residential sector : The role of policy and market forces," Other publications TiSEM b9cedba8-1310-4097-90fb-b, Tilburg University, School of Economics and Management.
    2. Fuerst, Franz & Oikarinen, Elias & Harjunen, Oskari, 2016. "Green signalling effects in the market for energy-efficient residential buildings," Applied Energy, Elsevier, vol. 180(C), pages 560-571.
    3. Best, Rohan & Sinha, Kompal, 2021. "Fuel poverty policy: Go big or go home insulation," Energy Economics, Elsevier, vol. 97(C).

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    More about this item

    Keywords

    Residential energy efficiency; Hedonic house price analysis;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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