Incentives to (not) disclose energy performance information in the housing market

Elisabetta Cornago and Luisa Dressler

Resource and Energy Economics, 2020, vol. 61, issue C

Abstract: Disclosure of energy performance certificates (EPCs) is often incomplete, which hampers their effectiveness in relieving information asymmetries between landlords and tenants in the housing market. Even when a certificate is available, landlords do not always disclose it. This contradicts the unraveling result, according to which all landlords should disclose quality information unless it is costly to do so. We leverage a cross-sectional dataset of residential rental advertisements from the Belgian region of Brussels to empirically evaluate incentives to disclose an EPC. We find that two fundamental assumptions for the unraveling result are not confirmed in our setting: tenants do not necessarily value energy performance of rental property and do not appear to rationally adjust their expectations when faced with dwellings that withhold their EPC. The paper formulates specific policy advice for reforming EPC mechanisms to increase disclosure rates.

Keywords: Information unraveling; Voluntary information disclosure; Asymmetric information; Energy efficiency; Certification (search for similar items in EconPapers)
JEL-codes: C21 D82 L15 Q48 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Incentives to (not) Disclose Energy Performance Information in the Housing Market (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:61:y:2020:i:c:s0928765519300697

DOI: 10.1016/j.reseneeco.2020.101162

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