Building a Sustainable Future: How Eco-Friendly Homes Are Driving Local Economic Development in Lisbon Metropolitan Area

Abstract

This article explored the impact of eco-friendly houses on economic development in the Lisbon metropolitan area. The study analyzed data from 18 municipalities between 2014 and 2020 using regression analysis with ordinary least squares (OLS) and fixed effects. The results indicate that national policies promoting residential energy efficiency positively impact economic development. Policies like subsidies, loans, and tax relief encourage homeowners to invest in energy-efficient technologies, boosting household disposable income and contributing to economic growth. The study found that an increase in the number of new constructions positively impacts economic development, leading to job creation and increased demand for construction materials and services. Additionally, growing eco-friendly houses can reduce energy consumption, lowering energy costs for homeowners and businesses and ultimately stimulating economic growth. In contrast, increasing the number of non-eco-friendly houses can have negative economic impacts. A robustness check using the method of moments quantile regression (MM-QR) confirmed the results from OLS with fixed effects, providing additional evidence supporting the robustness of the results.