These aspects are not only crucial for shaping future energy policy, but also have implications for the risk management of European financial institutions.īuildings account for 40% of EU energy use (European Parliament and Council 2010) and it is projected that 75–90% of the EU building stock will still be standing in 2050. This suggests that the energy efficiency ratings complement borrowers’ credit information and that a lender using information from both sources can make superior lending decisions than a lender using only traditional credit information. The results hold for a battery of robustness checks. In particular, we find that the default rate is lower for borrowers with less disposable income. There are three possible channels that might drive the results: (i) personal borrower characteristics captured by the choice of an energy-efficient building, (ii) improvements in building performance that could help to free-up the borrower’s disposable income, and (iii) improvements in dwelling value that lower the loan-to-value ratio. Using the logit regression and the extended Cox model, we find that building energy efficiency is associated with a lower probability of mortgage default. To this end, we construct a novel panel data set by combining Dutch loan-level mortgage information with provisional building energy ratings provided by the Netherlands Enterprise Agency. We investigate the relationship between building energy efficiency and the probability of mortgage default.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |