August 11, 2020
By:
Walter G. Wright
Category:
Arkansas Environmental, Energy, and Water Law
Arkansas Environmental, Energy, and Water Law
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The American Council for an Energy-Efficient Economy (“ACEEE”) issued an August 2020 report titled:
Energy Efficiency in Real Estate Listings: A Controlled Experiment (“Report”)
The Report is co-authored by:
- Reuven Sussman
- Christine Kormos
- Celine Park
- Emma Cooper
ACEEE describes the Report as a first-of-its-kind study indicating that energy efficiency scores in online real estate listings can encourage buyers to choose more efficient homes.
The organization states that the Report indicates that state or local policies that ensure home energy information is available to buyers would influence their choices and:
- Incentivize sellers to make home efficiency upgrades
- Incentivize builders to construct more efficient new homes
Key “takeaways” described by the Report include:
- Energy efficiency information encouraged home buyers to avoid the least efficient homes and choose more efficient homes in a simplified simulation of a real estate website.
- Presenting efficiency information for only the most efficient homes did not encourage home buyers to choose more efficient homes in our simulation. This suggests that a voluntary labeling policy might be less effective than a mandatory labeling policy in which all home listings must include energy efficiency information.
- Energy efficiency information was most valued (in terms of willingness to pay) by relatively wealthy and educated home buyers who planned to spend the most to buy their next homes.
- Home buyers valued efficiency most when it was presented as an image depicting the home’s efficiency score along a continuum (a line) from inefficient to efficient.
Recommendations for “policymakers” include:
- Include efficiency information in real estate website listings because home buyers value it.
- Ensure that listings include efficiency information for all homes, not just the most efficient homes.
- Use an intuitive energy scoring system to present energy information.
- Research and develop complementary policies.
A copy of the Report can be downloaded here.
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