Green Rental Premia, Going Dutch

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Presentation transcript:

Green Rental Premia, Going Dutch Prof.dr. Dirk Brounen Tilburg University / TIAS Business School

Residential energy, a no-brainer Society / government 40% of our energy use 30% of our carbon footprint Household € 150 / month 20% of monthly housing charge

The Energy Efficiency Gap Sustainable hesitation is due to: Imperfect information Bounded rationality Cost uncertainties Future benefits Split incentive Hassle

Bridging the Gap The case of housing Rich literature on the energy efficiency of home owner market Rental housing market, highly relevant / poorly documented: - Vast markets - Old dwellings - Low income tenants (energy poverty) - Split incentives Fuerst (2015) finds in green rental premiums in Wales Bond and Devine (2014) find similar results for U.S. multifamily homes We contribute by: Studying: NL, n = 13.137, unique hedonic data (NVM), t = 2012-2015. Using two different indicators (EPC Index and Label category) Stratified analysis for regulated and unregulated subsamples

Bridging the Gap Bridging that Gap Subsample: regulated rents Subsample: unregulated rents

Regression results Our results

Conclusions Conclusions Positive energy labels correlated with higher rental rates (9.7% dispersion). These findings are robust for controls for the size, location and quality of the dwelling. Energy efficiency is indeed capitalized into the rental rate. In the regulated market, we find energy efficient homes are rented out at a premium Energy efficiency seems to play no role yet in determining unregulated rental rates.

Communicating the sustainable facts Bridging the Gap

Bridging the Gap Visit us…. www.rentalcal.eu We help you make your effort to bridge the Energy Efficiency Gap!