IFin Seminar, Christophe Spaenjers - University of Colorado Boulder "Energy Labels, House Prices, and Efficiency Misreporting"
Institute of Finance
Date: 15 June 2023 / 12:25 - 13:40
Speaker: Christophe Spaenjers - University of Colorado Boulder
Title: "Energy Labels, House Prices, and Efficiency Misreporting"
Date: June 15, 2023
Time: 12:25 - 13:40
Room: A-32 (red building)
Lugano West Campus
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 underreporting by marginal bunching technicians is relatively small in economic terms, namely 0.7–1.9% of the relevant energy consumption threshold value.