Figure 2 shows the number of homes in each point total for all homes rated under AEGB ratings Version 2008.
This result suggests that the star thresholds served as a target for builders seeking to reap the price premium from moving up to a higher AEGB star category.
The hedonic model can be used to estimate the price premium from having an Energy Star, Environment for Living, or AEGB 1-, 2-, 3-, 4-, or 5-star home.
Energy Star ratings generate no price premium presumably because the AEGB ratings and EFL rating are more comprehensive.
In column 3, we use dummy variables for each of the AEGB stars and find that houses with 2 and 3 stars do not command statistically significant price premiums but houses with 1-, 4-, and 5-star ratings do.
Three star AEGB homes may be valuable, but the 3-star effect is difficult to discern from the data because 117 of the 172 (68%) of the 3-star homes in our sample are in the Mueller urban village.
The 1-star AEGB ratings are concentrated among homes below the median house value.
For the AEGB ratings, the 1 -star ratings yield significant price dividends in all but the most expensive homes where meeting a low end energy efficiency standard may not be a positive quality signal.
The effective ratings programs were the Environments for Living program, 1-star AEGB ratings, and the upper end of the AEGB quality ratings.
These costs are modest for AEGB ($50), but higher for Energy Star Homes and EFL depending on who does the certification.
With the exception of the analysis for Table 2, when we refer to AEGB stars these are the actual star rating achieved by the home, regardless of whether ABoR reported the rating.
We focus our analysis of producer response to AEGB labels since we only have data on the point totals from the AEGB labels.