Working Paper: NBER ID: w17200
Authors: Samuel Dastrup; Joshua S. Graff Zivin; Dora L. Costa; Matthew E. Kahn
Abstract: This study uses a large sample of homes in the San Diego area and Sacramento, California area to provide some of the first capitalization estimates of the sales value of homes with solar panels relative to comparable homes without solar panels. Although the residential solar home market continues to grow, there is little direct evidence on the market capitalization effect. Using both hedonics and a repeat sales index approach we find that solar panels are capitalized at roughly a 3.5% premium. This premium is larger in communities with a greater share of college graduates and of registered Prius hybrid vehicles.
Keywords: Solar Panels; Home Prices; Hedonic Pricing; Environmental Economics
JEL Codes: Q54; Q55; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| household characteristics (R20) | likelihood of living in a solar home (R21) |
| political ideology (P16) | likelihood of living in a solar home (R21) |
| education level (I24) | likelihood of living in a solar home (R21) |
| income (E25) | likelihood of living in a solar home (R21) |
| social status associated with solar ownership (R21) | market value of solar homes (R31) |
| solar panels (Q48) | unobserved home improvements (D13) |
| solar panel installations (Q48) | recuperation of installation costs (O22) |
| solar panel installations (Q48) | home prices (R31) |