Energy Labels, House Prices, and Efficiency Misreporting

Xinyu Lu and Christophe Spaenjers
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Xinyu Lu: HEC Paris - Ecole des Hautes Etudes Commerciales
Christophe Spaenjers: University of Colorado [Boulder]

Working Papers from HAL

Abstract: What are the implications of the use of discrete energy efficiency labels in the housing market? Using public administrative data from France, where properties are evaluated on a scale from A to G, we show that house prices drop — but time on the market jumps — discontinuously when energy consumption crosses the boundary to a lower rating. These results suggest that, when searching for a home, households form consideration sets excluding properties with energy labels that are considered too unfavorable. We also document substantial bunching of energy performance estimates just below the relevant cut-off values. This pattern appears to be driven by intentional misreporting of properties' energy efficiency by certified technicians. However, we estimate that the average under-reporting by marginal bunching technicians is relatively small in economic terms, namely 0.7–1.9% of the relevant energy consumption threshold value.

Keywords: energy efficiency; energy labels; house prices; bunching; misreporting (search for similar items in EconPapers)
Date: 2023-04-03
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-04414133

DOI: 10.2139/ssrn.4408760

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