Green Labels in Housing: Further Evidence on Their Effectiveness

Abstract

Most evidence suggesting that green labels can progressively transform the housing stock into a more sustainable one has been produced through hedonic regressions, showing that certified properties are sold with a price premium. This article demonstrates that this method is likely to estimate positive green premiums even if green labels are capable of influencing the purchase decisions of only a small number of homebuyers. It is worth asking, then, how many consumers are effectively paying green premiums? Will there be more or less of them in the future? The transformative power of green labels cannot be assessed via hedonic regression analyses alone.

Keywords

• building environmental assessment
• green labels
• hedonic regression analysis
• energy performance certificates
• heterogeneous consumers