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Effects of Mandatory Energy Efficiency Disclosure in Housing Markets

Erica Myers, Steven Puller () and Jeremy West

No 26436, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Mandatory disclosure policies are increasingly prevalent 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 this requirement increases price capitalization of energy efficiency and encourages energy-saving residential investments. We present additional evidence characterizing the market failure as symmetrically incomplete information, which is ameliorated by government intervention. More generally, we formalize and provide empirical support for seller ignorance as a motivation for disclosure policies in markets with bilaterally incomplete information about quality.

JEL-codes: D83 K32 L15 Q48 R31 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-ene, nep-law, nep-reg and nep-ure
Note: EEE LE PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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