The Role of Dual Pane Windows and Improvement Age in Explaining Residential Property Values

Real estate literature concerned with energy efficient or green property features focuses primarily on the impact of green labeling, certifications and designations. There is a modest amount of research on the valuation impact of individual green features such as dual pane windows, an important and widely implemented green feature in the American housing stock. From a sample of single-family residential sale transactions, we develop and test a valuation theory for dual pane windows and our results from a hedonic pricing model indicate a positive and statistically significant direct effect for residential transactions with improvements possessing the dual pane window feature. However, when a dual pane window-age variable is introduced, the direct effect disappears and is replaced by this interaction effect.The supply of properties with dual pane windows decreases with property age and the significance of this interaction effect suggests that the valuation impact of the dual pane window feature increases with property age