Impact of energy efficiency information on homebuying searches: evidence from a visual choice experiment in the USA

Abstract

A lack of specificity exists on whether likely homebuyers utilize home energy efficiency information in future home searches. This study addresses this gap using a visual choice experiment to sample 1538 intended homebuyers in the USA, and the preference for home attributes through a simplified real estate website. Each home presented on the website featured six attributes: price, number of bedrooms, number of bathrooms, square footage, number of days on the market, energy efficiency, and a photo — each relative to participants’ initial specification of location, preferred price, number of bedrooms, and number of bathrooms. The respondents were assigned to one of six experimental conditions where energy information was provided as (i) estimated annual energy costs, (ii) home energy score (number only), (iii) home energy score along a continuum, (iv) estimated annual energy costs and energy score along a continuum, (v) home energy scores provided for only above average homes, and (vi) no energy information provided (control). We find that homebuyers are more likely to select energy efficient homes when presented with any form of energy efficiency information, with conditions that include home energy scores providing the greatest increase in energy efficiency. Furthermore, this preference for energy efficiency information persists even under less-than-ideal home searches. The preference for energy efficient homes is influenced by type of home and region with detached homebuyers and homebuyers in the Midwest US Census region more likely to select homes featuring higher energy efficiency scores. Finally, we find that rural homebuyers are more likely to prefer energy efficient homes over urban homebuyers.