How do lenders price energy-efficiency loans? Evidence from France
Giraudet Louis-Gaetan  1, 2@  , Anna Petronevich  2@  , Laurent Faucheux  2@  
École des Ponts ParisTech (ENPC), CNRS : UMR8568, Ecole des Hautes Etudes en Sciences Sociales (EHESS), AgroParisTech : UP1102
CNRS : UMR8568, Ecole des Ponts ParisTech

Scaling up home energy retrofits requires that associated loans be priced efficiently. We test this hypothesis using a novel dataset of posted interest rates for unsecured consumer credit in France. We designed a web-scrapping algorithm that collected interest-rate data every week, for two years, from loan simulators made available online by 15 lending institutions covering the near totality of the market. We examine potential pricing distortions with respect to energy-efficient versus non-energy-efficient principals on the one hand, home retrofit versus other household investments – automobiles in particular – on the other. We find that energy-efficient principals carry lower interest rates, which is consistent with efficient pricing and corroborates recent studies. We additionally find evidence of price differentiation of home retrofits and automobiles, which suggests that lenders use loan purposes as a screening device of unobserved borrowers' characteristics. This distortion can undermine efficient pricing along the energy-efficiency dimension.

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