Rebound Effects as an Obstacle to Sustainable Housing Goals: How Green Features Lead to Larger‐Sized Homes

ABSTRACT Global resource use and emissions continue to rise despite the widespread adoption of more energy‐efficient products and technologies. The current research addresses this green paradox by examining how the availability of rooftop solar panels and other energy‐saving green features leads to rebound effects that inadvertently increase the popularity of physically larger and more resource‐intensive homes. A conjoint analysis‐based survey of US home buyers is utilized to determine the presence of income and moral licensing‐based rebound effects, which together are predicted to increase buyer preference for larger homes. As expected, the findings show a shift in buyer preference towards larger homes due to significant income and moral licensing‐based rebound effects created by the availability of energy‐saving/guilt‐reducing green features. The conjoint analysis results are then utilized in conjunction with home construction‐sourced secondary data to estimate the economic and environmental implications of the larger home sizes. These estimates reveal that larger homes increase the financial attractiveness of green features for home builders and buyers, but at the cost of largely eliminating their environmental benefits. This suggests that efforts to achieve the widespread adoption of green features should focus on introducing them on physically larger products first when doing so makes the features more popular and profitable, because such popularity may create the potential for scale‐based cost reductions that could lead to their wider adoption across all product sizes with consequent environmental benefits.