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Energy Performance Certificates and Rental Prices of Residential Housing in Norway -What is the impact of energy labeling on Norwegian rental prices?

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  • Aras KJ
  • Ole Jakob Sønstebø

Abstract

Energy efficiency in the residential housing market can play an important role in the reduction of global carbon emissions. Energy Performance Certificates (EPCs) provide actors with information that can be used to make better-informed decisions and integrate energy efficiency into their decision making process. In addition, the information from EPCs should provide an incentive for actors in this market to invest in energy efficiency, as it can be assumed that improving the energy performance of a building may lead to higher transaction prices and rents on the market. This paper reports the first Norwegian evidence on the economic implication of EPCs on rental market prices. Applying the multilevel estimation approach to investigate the relation between energy labeling and rental prices in Norway for 860 000 observations, we find strong evidence of a positive price premium. Moreover, the premium is higher for bigger cities than in rural areas.

Suggested Citation

  • Aras KJ & Ole Jakob Sønstebø, 2018. "Energy Performance Certificates and Rental Prices of Residential Housing in Norway -What is the impact of energy labeling on Norwegian rental prices? ," ERES eres2018_125, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2018_125
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2018-125
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    Keywords

    energy performance certificates; Environmental regulation; Housing rental prices; Information and decisions; Real Estate Economics;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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