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Evidence of Rational Market Valuations for Home Energy Efficiency

Publication Type:

Journal Article

Source:

Number 4 (1998)

URL:

http://scholar.google.com/scholar?as_q=A+General+Measure+of+Ecological+Behaviour&as_authors=Kaiser

Abstract:

According to this study, residential real estate markets assign to energy-efficient homes an incremental value that reflects the discounted value of annual fuel savings. The capitalization rate used by homeowners was expected to be 4%10.; reflecting the range of after-tax mortgage interest rates during the 1990s and resulting in an incremental home value of $10 to around $25 for every $1 reduction in annual fuel bills. Regression analysis of American Housing Survey data confirms this hypothesis for national and metropolitan area samples, attached and detached housing, and detached housing subsamples using a specific fuel type as the main heating fuel.