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Do Consumers Care about the Energy Efficiency of Buildings? Understanding Residential Choice Based on Energy Performance Certificates

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  • Hyunjoo Lee

    (Technology Management, Economics, and Policy Program, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea)

  • Misuk Lee

    (Department of Global Business, Changwon National University, 20 Changwondaehak-ro, Uichang-gu, Changwon, Gyeongsangnamdo 51140, Korea)

  • Sesil Lim

    (Erasmus School of Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000DR Rotterdam, The Netherlands)

Abstract

Disclosing the energy performance information for buildings has been expected to become an important policy for controlling energy demand and reducing CO 2 emissions, but its effectiveness remains controversial. This study investigates the effect of energy performance information on consumer residential choice by using a discrete choice experiment in South Korea. The estimation results confirmed that the energy efficiency level of the given housing has a significant effect on consumer residential choice when the related information is actually delivered. Combined with evidence from the simulation study, we suggest that obligating the owners to provide energy performance information to potential buyers/tenants would be necessary for enhancing the use of the information during the consumer decision-making process. Additionally, the simulation result implies that the effectiveness of the policy can be underestimated by the price premium related to energy efficiency. Therefore, we suggest that the government should control the price premium for high-efficiency buildings at the early stage so that the policy related to disclosing the energy performance can be on track.

Suggested Citation

  • Hyunjoo Lee & Misuk Lee & Sesil Lim, 2018. "Do Consumers Care about the Energy Efficiency of Buildings? Understanding Residential Choice Based on Energy Performance Certificates," Sustainability, MDPI, vol. 10(11), pages 1-18, November.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:11:p:4297-:d:184115
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    5. Paolo Bragolusi & Chiara D’Alpaos, 2021. "The Willingness to Pay for Residential PV Plants in Italy: A Discrete Choice Experiment," Sustainability, MDPI, vol. 13(19), pages 1-13, September.
    6. Velvart, Joëlle & Dato, Prudence & Kuhlmey, Florian, 2022. "Tailored interventions in a major life decision: A home relocation discrete choice experiment," Working papers 2022/03, Faculty of Business and Economics - University of Basel.
    7. Ihwan Ghazali & Salwa Hanim Abdul-Rashid & Siti Zawiah Md Dawal & Irianto Irianto & Safarudin Gazali Herawan & Fu-Haw Ho & Rohana Abdullah & Amir Hamzah Abdul Rasib & Nur Wardah Sufina Padzil, 2023. "Embedding Green Product Attributes Preferences and Cultural Consideration for Product Design Development: A Conceptual Framework," Sustainability, MDPI, vol. 15(5), pages 1-19, March.
    8. Koengkan, Matheus & Fuinhas, José Alberto & Osmani, Fariba & Kazemzadeh, Emad & Auza, Anna & Alavijeh, Nooshin Karimi & Teixeira, Mônica, 2022. "Do financial and fiscal incentive policies increase the energy efficiency ratings in residential properties? A piece of empirical evidence from Portugal," Energy, Elsevier, vol. 241(C).
    9. Felipe Encinas & Carlos Marmolejo-Duarte & Carlos Aguirre-Nuñez & Francisco Vergara-Perucich, 2020. "When Residential Energy Labeling Becomes Irrelevant: Sustainability vs. Profitability in the Liberalized Chilean Property Market," Sustainability, MDPI, vol. 12(22), pages 1-17, November.

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