Mandatory Energy Efficiency Disclosure in Housing Markets

Erica Myers, Steven L. Puller and Jeremy West

American Economic Journal: Economic Policy, 2022, vol. 14, issue 4, 453-87

Abstract: Mandatory disclosure policies are implemented broadly despite sparse evidence that they improve market outcomes. We study the effects of requiring home sellers to provide buyers with certified audits of residential energy efficiency. Using similar nearby homes as a comparison group, we find that this requirement increases price premiums for energy efficiency and encourages energy-saving investments. We additionally present evidence highlighting the market failure—incomplete information by both buyers and sellers—that prevents widespread voluntary disclosure of energy efficiency in housing transactions. Our findings support that disclosure policies can improve market outcomes in settings with symmetrically incomplete information.

JEL-codes: D83 K32 L98 Q41 Q48 R31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/pol.20200539

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