A green value beyond energy savings? Capitalization of energy labels versus Techno-economic assessment of energy renovations in the French housing market
Edouard Civel  1, 2@  
1 : Chaire économie du climat  -  Website
Chaire économie du climat
Chaire Economie du Climat Palais Brongniart, 4e étage 28 place de la Bourse 75002 Paris -  France
2 : EconomiX  -  Website
Université Paris Nanterre : UMR7235, Centre National de la Recherche Scientifique : UMR7235
Bâtiment G200 Avenue de la République92001 NANTERRE CEDEX -  France

While a growing number of studies evidence the existence of a green value associated to energy labels, these studies disagree on the magnitude of this green premium and lack comparison with associated renovation costs and expected savings for households. This paper investigates the green value of French houses in two areas: one urban, the Lyon metropolis, and one rural, the Brest area in Brittany. The traditional hedonic analysis of transaction prices in those regions is coupled with Geographic Information Systems to regress both on the intrinsic characteristics of dwellings and on the distance to various public amenities, such as parks, city center or public transports. Moreover, a spatial econometric model is estimated to control for neighborhood effects. Results evidence a significant green value in both areas. If relative premium is higher in Brittany, switching to absolute terms evidence tantamount green values in the two regions, about 35,000€. Using a dataset on renovation costs, I find that the green premium matches with the investment required to improve energy efficiency. Green value is then the capitalization of renovation costs. Nevertheless, the use of empirical discount rates evidenced by the economic literature suggests that this green value is significantly higher than expected savings on the energy bill. Co-benefits of a more efficient house, such as improved thermal comfort, could then be more efficient drivers of the renovation decision than usual discourse on energy savings.


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