Impact of home energy efficiency labeling program on housing decisions in South Korea: A choice experiment approach

Abstract

The South Korean government has been providing information on home energy efficiency since 2001 in order to incentivize improvements in the energy efficiency of both existing and new buildings. Whether such information provision delivers the intended outcomes hinges on consumers' preferences for home energy efficiency in the real estate market. This study investigates South Korean consumers' preferences for home energy efficiency in the real estate market by applying a choice experiment approach. Using a conditional logit model and a latent class model, this study concludes that less than 20% of Korean consumers consider home energy efficiency as a significant factor in their housing decisions and identifies the sources of taste variations in Korean consumers' preferences for home energy efficiency. The findings of this study imply that the current information programs on home energy efficiency in South Korea should be much improved to achieve its goal.