Working Paper: NBER ID: w18781
Authors: Matthew E. Kahn; Nils Kok; John M. Quigley
Abstract: Commercial real estate plays a key role in determining the urban sustainability of a metropolitan area. While the residential sector has been the primary focus of energy policies, commercial buildings are now responsible for most of the durable building stock's total electricity consumption. This paper exploits a unique panel of commercial buildings to investigate the impact of building vintage, contract incentives, and human capital on electricity consumption across commercial structures. We document that electricity consumption and building quality are complements, not substitutes. Technological progress may reduce the energy demand from heating, cooling and ventilation, but the behavioral response of building tenants and the large-scale adoption of appliances more than offset these savings, leading to increases in energy consumption in more recently constructed, more efficient structures.
Keywords: electricity consumption; commercial buildings; human capital; contract incentives
JEL Codes: H23; H41; Q54; Q55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| newer, high-quality commercial buildings (R33) | higher electricity consumption (L94) |
| technological improvements (O33) | increased energy use (Q41) |
| zero marginal costs for energy consumption (Q41) | higher electricity consumption (L94) |
| contract structures (L14) | energy consumption (Q41) |
| full-service leases (L85) | higher electricity consumption (L94) |
| onsite building management (L74) | lower electricity consumption (Q41) |
| unemployment rate (J64) | electricity consumption (L94) |