Do Consumers Care about the Energy Efficiency of Buildings? Understanding Residential Choice Based on Energy Performance Certificates

Disclosing the energy performance information for buildings has been expected to become an important policy for controlling energy demand and reducing CO2 emissions, but its effectiveness remains controversial. This study investigates the effect of energy performance information on consumer residential choice by using a discrete choice experiment in South Korea. The estimation results confirmed that the energy efficiency level of the given housing has a significant effect on consumer residential choice when the related information is actually delivered. Combined with evidence from the simulation study, we suggest that obligating the owners to provide energy performance information to potential buyers/tenants would be necessary for enhancing the use of the information during the consumer decision-making process. Additionally, the simulation result implies that the effectiveness of the policy can be underestimated by the price premium related to energy efficiency. Therefore, we suggest that the government should control the price premium for high-efficiency buildings at the early stage so that the policy related to disclosing the energy performance can be on track.