Limited Attention in the Housing Market: Threshold Effects of Energy-Performance Certificates on Property Prices and Energy-Efficiency Investments

Sejas‐Portillo, Rodolfo; Comerford, David; Moro, Mirko; Stowasser, Till

doi:10.2139/ssrn.3727743

Cited by 4 publications

(13 citation statements)

References 26 publications

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“…As we have noted, the perception of thresholds is an unavoidable effect of any label that involves a scale. Further, it is well-established that thresholds influence decisions, including high-stakes ones, 12,18 yet little research deliberately tweaks the placement of thresholds to test effects on behavior. Our suggestion that the A-G categories depict septiles of the distribution rather than absolute levels also has a broader implication: We hypothesize that dynamic labels will generally outperform absolute labels in motivating investment, whether the investment involves money (as in retirement savings), time (as in educational contexts), or effort (as when people engage in exercise).…”

Section: Discussionmentioning

confidence: 99%

“…England from 2012 to 2019 invested in retrofitting and applied for an updated energy label. 12 Our analysis identified two predictors of filing for a new label: (a) the initial label showed the current energy-efficiency score to be close to a threshold, and (b) the second audit brought the property into a higher color-letter category. 12 One mechanism that might contribute to these results is that, as in Table 1, English energy labels display the expected costs of replacing or installing an energy-efficient technology as well as the number of points the property would be expected to gain from these investments.…”

Section: Figure 1 the Uk Version Of The Eu Energy Labelmentioning

confidence: 92%

“…12 Our analysis identified two predictors of filing for a new label: (a) the initial label showed the current energy-efficiency score to be close to a threshold, and (b) the second audit brought the property into a higher color-letter category. 12 One mechanism that might contribute to these results is that, as in Table 1, English energy labels display the expected costs of replacing or installing an energy-efficient technology as well as the number of points the property would be expected to gain from these investments. The energy label made it easy for sellers to calculate whether their investment would enable a property to cross the threshold to a new energy-efficiency category.…”

Section: Figure 1 the Uk Version Of The Eu Energy Labelmentioning

confidence: 92%

“…Had they made the same investment when they first moved to a property, they would have enjoyed the same selling price premium as well as the consumption benefits of a more energy-efficient home. 12 Thus, providing information and prompts when buyers are moving into a home, a time when they are formulating plans for the future, might be especially effective. If so, it might be useful to have energy labels do more than merely present information.…”

Section: Recommendation 3: Label Designers Should Take Perceptions Of...mentioning

confidence: 99%

“…We estimate in the working paper that sellers gain thousands of pounds in the selling price from boosting a property across a threshold. 12 In short, energy audits can induce retrofitting.…”

Section: Figure 1 the Uk Version Of The Eu Energy Labelmentioning

confidence: 99%

See 4 more Smart Citations

Leveraging the Motivational Effects of Labels: Lessons from Retrofitting

Comerford,

Moro,

Sejas-Portillo

et al. 2021

Behavioral Science & Policy

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Retrofitting—replacing obsolete home infrastructure with more energy-efficient substitutes—will be essential to reducing energy use and carbon emissions in the future. Yet European and American households have proved reluctant to undertake these changes. Evidence has shown that a home energy audit can motivate people to retrofit their homes. In this article, we show that including the EU energy label—which displays the property's energy-efficiency rating—in energy audit reports is a simple way to enhance the audit's effectiveness: When energy labels are required as part of the process of selling a property, home sellers become motivated to retrofit if doing so boosts their property into a higher efficiency category on the label. Drawing on insights from the behavioral science literature, we offer suggestions for how policymakers can leverage this motivation to expand household investments in retrofitting. Although our proposals focus on retrofitting, some of them could also encourage other actions that would reduce energy consumption.

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Section: Discussionmentioning

confidence: 99%

Section: Figure 1 the Uk Version Of The Eu Energy Labelmentioning

confidence: 92%

Section: Figure 1 the Uk Version Of The Eu Energy Labelmentioning

confidence: 92%

Section: Recommendation 3: Label Designers Should Take Perceptions Of...mentioning

confidence: 99%

Section: Figure 1 the Uk Version Of The Eu Energy Labelmentioning

confidence: 99%

See 3 more Smart Citations

Leveraging the Motivational Effects of Labels: Lessons from Retrofitting

Comerford,

Moro,

Sejas-Portillo

et al. 2021

Behavioral Science & Policy

View full text Add to dashboard Cite

show abstract

A review and reflection on open datasets of city-level building energy use and their applications

Jin

Zhang

Xiao

et al. 2023

Energy and Buildings

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Leveraging the motivational effects of labels: Lessons from retrofitting

Comerford¹,

Moro²,

Sejas‐Portillo³

et al. 2021

Behavioral Science & Policy

View full text Add to dashboard Cite

Retrofitting-replacing obsolete home infrastructure with more energy-efficient substituteswill be essential to reducing energy use and carbon emissions in the future. Yet European and American households have proved reluctant to undertake these changes. Evidence has shown that a home energy audit can motivate people to retrofit their homes. In this article, we show that including the EU energy label-which displays the property's energy-efficiency ratingin energy audit reports is a simple way to enhance the audit's effectiveness: When energy audits are required as part of the process of selling a property, home sellers are motivated to improve their property's energy-efficiency rating through retrofitting and doing so makes their property more valuable. Drawing on insights from the behavioral science literature, we offer suggestions for how policymakers can leverage this motivation to expand household investments in retrofitting. Although our proposals focus on retrofitting, some of them could also encourage other actions that would reduce energy consumption.

show abstract

Limited Attention in the Housing Market: Threshold Effects of Energy-Performance Certificates on Property Prices and Energy-Efficiency Investments

Cited by 4 publications

References 26 publications

Leveraging the Motivational Effects of Labels: Lessons from Retrofitting

Leveraging the Motivational Effects of Labels: Lessons from Retrofitting

A review and reflection on open datasets of city-level building energy use and their applications

Leveraging the motivational effects of labels: Lessons from retrofitting

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