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The Distributional Effects of Building Energy Codes

Chris Bruegge, Tatyana Deryugina, Erica Myers

Chapter in NBER book Energy Policy Tradeoffs between Economic Efficiency and Distributional Equity (2019), Tatyana Deryugina, Don Fullerton, and Billy Pizer, organizers
Conference held September 16-17, 2016
Published in March 2019 by Journal of the Association of Environmental and Resource Economists, volume 6, number S1 (University of Chicago Press)
© 2019 by the National Bureau of Economic Research

We evaluate the distributional consequences of building energy codes for home characteristics, energy use, and home value. We exploit spatial variation in California’s code strictness created by building climate zones, combined with information on over 350,000 homes located within 3 kilometers of climate zone borders. Our key findings are that stricter codes create a nontrivial reduction in homes’ square footage and the number of bedrooms at the lower end of the income distribution. On a per-dwelling basis, we observe energy use reductions only in the second lowest income quintile, driven by decreases in square footage. Energy use per square foot actually increases in the bottom quintile. Home values of lower-income households fall, while those of high-income households rise, suggesting that building energy codes result in more undesirable distortions for lower-income households.

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Document Object Identifier (DOI): https://doi.org/10.1086/701189

This chapter first appeared as NBER working paper w24211, The Distributional Effects of Building Energy Codes, Christopher D. Bruegge, Tatyana Deryugina, Erica Myers
 
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