This paper studies the link between incentives for energy-efficient building renovations (the 'Superbonus') and the dynamics of construction costs of residential buildings in Italy. To this end, an empirical model is estimated that includes, as control variables, the prices of some raw materials and the indicators of input shortages and activity in the construction sector.
The paper documents how construction costs in Italy have risen markedly since 2021, when the Superbonus became more and more commonly used. The empirical analysis shows that the Superbonus likely contributed about half of the increase in construction costs between September 2021 and December 2023.
