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Weather to pay attention to energy efficiency on the housing market

Authors

Fang,  Ximeng
External Organizations;

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Singhal,  Puja
Potsdam Institute for Climate Impact Research;

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1-s2.0-S0165176524005251-main.pdf
(Publisher version), 882KB

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Citation

Fang, X., Singhal, P. (2024 online): Weather to pay attention to energy efficiency on the housing market. - Economics Letters, 245, 112041.
https://doi.org/10.1016/j.econlet.2024.112041


Cite as: https://publications.pik-potsdam.de/pubman/item/item_30521
Abstract
Energy efficiency improvements can play an important role in reducing emissions from residential buildings, yet consumer decisions involving energy costs can be subject to bounded rationality due to, e.g., inattention and myopia. We present evidence that long-term, high-stakes decisions in the housing market are influenced by short-term contextual factors. Using data on housing transactions through a large online platform in Germany, we document that houses purchased following unusually cold weather tend to be more energy efficient, while the reverse is not true for unusually warm weather. This asymmetry suggests that the effect of temperature fluctuations on energy efficiency demand may be driven by salience of heating costs.