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Evidence on capitalization of
energy technologies in a housing market
Authors: Students:Oskari Harjunen Maria Vittoria LafronzaMatti Liski Pietro Raffaini Cataldo Venneri
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Aim of the paper
Is there a connection between the market pricing of houses and the lower cost of district heating?
Are the consumers conscious and well informed?
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Institutional context
3 Basilar elements:
a) Houses are locked-in to technologies of interest at the time of construction;
b) Similar houses co-exists in same neighborhoods in both technologies;
c) The financial value of having one of the technologies can be assessed.
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Two types of technologies
Electric
District heating
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Costs
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PRESENT VALUE DIFFERENCES
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The model
It is composed of 1868 houses
Both technologies coexist
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Regression
The regression model is given by this formula:
Ln pi,l,t= βhi+γXi+ΦNl+ui,l+yi.t+εi,l,t
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Robustness
Technologies neighborhoods
Selection bias: proportional selection assumption
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Conclusion
The Finnish housing market shows that heating cost saving corresponds to higher prices of the houses.
BUT………….SOME CRITICTS :
1. In the model the sample is too small
2. Socio-economic variables are still important
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THANK YOU FOR YOUR ATTENTION!!!