Retrofitting houses with insulation: a cost–benefit analysis of a randomised community trial R Chapman, 1 P Howden-Chapman, 2 H Viggers, 2 D O’Dea, 3 M Kennedy 4 1 Environmental Studies Programme, School of Geography, Environment and Earth Sciences, Victoria University of Wellington, New Zealand; 2 He Kainga Oranga/ Housing and Health Research Programme; Department of Public Health, University of Otago, Wellington, New Zealand; 3 University of Otago, Wellington, New Zealand; 4 Ministry of Health, Wellington, New Zealand Correspondence to: Dr R Chapman, Graduate Programme in Environmental Studies, Victoria University of Wellington, PO Box 600, Wellington, New Zealand; ralph.chapman@vuw.ac.nz Accepted 23 October 2008 ABSTRACT Background: Housing is an important environmental influence on population health, and there is growing evidence of health effects from indoor environment characteristics such as low indoor temperatures. However, there is relatively little research, and thus little firm guidance, on the cost-effectiveness of public policies to retrospectively improve the standards of houses. The purpose of this study was to value the health, energy and environmental benefits of retrofitting insulation, through assessing a number of forms of possible benefit: a reduced number of visits to GPs, hospitalisations, days off school, days off work, energy savings and CO 2 savings. Methods: All these metrics are used in a cluster randomised trial—the ‘‘Housing, Insulation and Health Study’’—of retrofitting insulation in 1350 houses, in which at least one person had symptoms of respiratory disease, in predominantly low-income communities in New Zealand. Results: Valuing the health gains, and energy and CO 2 emissions savings, suggests that total benefits in ‘‘present value’’ (discounted) terms are one and a half to two times the magnitude of the cost of retrofitting insulation. Conclusion: This study points to the need to consider as wide a range of benefits as possible, including health and environmental benefits, when assessing the value for money of an intervention to improve housing quality. From an environmental, energy and health perspective, the value for money of improving housing quality by retrofitting insulation is compelling. Housing is a key environmental influence on population health. 1 People in developed countries such as the USA, Canada and New Zealand spend about 90% of their lives indoors and most of this time is spent at home. 23 Improving housing is a preventive health strategy with social benefits: exposure to substandard housing is not evenly distributed across populations. 1 Recent studies have provided increasing evidence on the specific health risks and costs of a cold, damp and mouldy indoor environment. 4 There are health risks asso- ciated with low indoor temperatures during winter and high temperatures in summer. 56 Cold housing, below the World Health Organization recom- mended minimum of 18uC, 7 has been associated with avoidable excess winter mortality. 89 Increasing periods of high temperatures associated with climate change have been linked to extreme indoor temperatures, and higher mortality, in the USA and Europe. 10 11 There is little solid research on the value for money of improving housing quality. 12 Methodological questions can be raised about the benefits that some studies 13 ascribe to residential energy efficiency measures. What studies there are tend to either present the analysis of housing improvements in terms of a benefit–cost ratio, where benefits over the lifetime of an investment are discounted back to the present and compared with costs, 14 or present results in terms of a net present value (NPV) estimate of ‘‘discounted benefits less costs’’, as reported for residential ‘‘weatherisation’’ programmes in the USA. 15 These measures are useful for both house owners (public or private) and policy advisers estimating how much to invest in public assistance for housing improvements. The challenge is to reliably esti- mate the range of benefits, such as health benefits of damp and mould reduction or injury prevention, energy savings and benefits accruing beyond the household in question, such as improved outdoor air quality, noise reduction or CO 2 emission savings. While many countries including the UK and New Zealand are setting higher standards for new housing, 16 17 most of the existing housing stock was not built to these standards. There is little guidance on the relative benefits and costs of retrospectively improving the standards of these houses. Some studies have modelled the effectiveness of retro- fitting insulation. A US survey of retrofitting of multiunit housing 18 found highly variable payback periods for various retrofits, including insulation; a British study of private rental housing found retrofitting insulation effective in terms of mod- elled reductions in fuel use. 19 Another study undertook a payback analysis based on simulating the energy-saving effect of insulation retrofitting of a single house. 20 Although the first of these studies touched on comfort, none reported health improvements. One study examined energy measures in low- cost housing in South Africa, 21 and concluded that health benefits, along with employment gains and reduced local household expenditure, justified modelled energy efficiency measures. Another study 22 identified significant health benefits, based on extrapolating ambient air pollutant emission savings from energy use simulations. A Swiss study noted that co-benefits, such as improved living comfort, good indoor air quality and better noise protection may yield gains of the same order of magnitude as energy-related benefits. 23 An Irish study modelled the returns on domestic energy conservation opportunities, concluding that a home retrofitting programme would result in a 3:1 benefit–cost ratio, including energy savings, health benefits and reduction in avoidable mortal- ity. 6 None of these studies, however, used direct Research agenda J Epidemiol Community Health 2009;63:271–277. doi:10.1136/jech.2007.070037 271