IDEAS home Printed from https://ideas.repec.org/a/eee/jhouse/v67y2025ics1051137725000026.html
   My bibliography  Save this article

Mandatory energy efficiency disclosure policies and house prices

Author

Listed:
  • Damen, Sven
  • van Kempen, Tijmen

Abstract

Mandatory disclosure policies are increasingly being used by governments around the world to reduce information-driven market failures related to climate risk and energy efficiency. We exploit two policy changes in Flanders (Belgium) to study the causal effect of mandatory energy efficiency disclosure policies on house prices. We find that the introduction of mandatory energy performance certificates with an energy efficiency score in 2008 did not affect the association between energy efficiency and sales prices, indicating that the policy change did not reduce information frictions. However, the introduction of EPC labels in 2019 affected the capitalization of energy efficiency.

Suggested Citation

  • Damen, Sven & van Kempen, Tijmen, 2025. "Mandatory energy efficiency disclosure policies and house prices," Journal of Housing Economics, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:jhouse:v:67:y:2025:i:c:s1051137725000026
    DOI: 10.1016/j.jhe.2025.102043
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1051137725000026
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhe.2025.102043?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Lu, Xinyu & Spaenjers, Christophe, 2023. "Energy Labels, House Prices, and Efficiency Misreporting," HEC Research Papers Series 1483, HEC Paris.
    2. Daryl Fairweather & Matthew E. Kahn & Robert D. Metcalfe & Sebastian Sandoval Olascoaga, 2024. "Expecting Climate Change: A Nationwide Field Experiment in the Housing Market," NBER Working Papers 33119, National Bureau of Economic Research, Inc.
    3. Olaussen, Jon Olaf & Oust, Are & Solstad, Jan Tore, 2017. "Energy performance certificates – Informing the informed or the indifferent?," Energy Policy, Elsevier, vol. 111(C), pages 246-254.
    4. Piet Eichholtz & Nils Kok & John M. Quigley, 2013. "The Economics of Green Building," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 50-63, March.
    5. Koichiro Ito & Shuang Zhang, 2020. "Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1627-1672.
    6. Fuerst, Franz & McAllister, Pat & Nanda, Anupam & Wyatt, Pete, 2016. "Energy performance ratings and house prices in Wales: An empirical study," Energy Policy, Elsevier, vol. 92(C), pages 20-33.
    7. Hyland, Marie & Lyons, Ronan C. & Lyons, Seán, 2013. "The value of domestic building energy efficiency — evidence from Ireland," Energy Economics, Elsevier, vol. 40(C), pages 943-952.
    8. Athanasios Votsis & Adriaan Perrels, 2016. "Housing Prices and the Public Disclosure of Flood Risk: A Difference-in-Differences Analysis in Finland," The Journal of Real Estate Finance and Economics, Springer, vol. 53(4), pages 450-471, November.
    9. Gao, Xuwen & Song, Ran & Timmins, Christopher, 2023. "Information, migration, and the value of clean air," Journal of Development Economics, Elsevier, vol. 163(C).
    10. Piet Eichholtz & Nils Kok & John M. Quigley, 2010. "Doing Well by Doing Good? Green Office Buildings," American Economic Review, American Economic Association, vol. 100(5), pages 2492-2509, December.
    11. James M. Sallee, 2014. "Rational Inattention and Energy Efficiency," Journal of Law and Economics, University of Chicago Press, vol. 57(3), pages 781-820.
    12. Kahn, Matthew E. & Kok, Nils, 2014. "The capitalization of green labels in the California housing market," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 25-34.
    13. Fuerst, Franz & McAllister, Patrick & Nanda, Anupam & Wyatt, Peter, 2015. "Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England," Energy Economics, Elsevier, vol. 48(C), pages 145-156.
    14. de Ayala, Amaia & Galarraga, Ibon & Spadaro, Joseph V., 2016. "The price of energy efficiency in the Spanish housing market," Energy Policy, Elsevier, vol. 94(C), pages 16-24.
    15. Fuerst, Franz & Oikarinen, Elias & Harjunen, Oskari, 2016. "Green signalling effects in the market for energy-efficient residential buildings," Applied Energy, Elsevier, vol. 180(C), pages 560-571.
    16. Erica Myers & Steven L. Puller & Jeremy West, 2022. "Mandatory Energy Efficiency Disclosure in Housing Markets," American Economic Journal: Economic Policy, American Economic Association, vol. 14(4), pages 453-487, November.
    17. Panle Jia Barwick & Shanjun Li & Liguo Lin & Eric Yongchen Zou, 2024. "From Fog to Smog: The Value of Pollution Information," American Economic Review, American Economic Association, vol. 114(5), pages 1338-1381, May.
    18. Manuel Frondel & Andreas Gerster & Colin Vance, 2020. "The Power of Mandatory Quality Disclosure: Evidence from the German Housing Market," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(1), pages 181-208.
    19. Aydin, Erdal & Brounen, Dirk & Kok, Nils, 2020. "The capitalization of energy efficiency: Evidence from the housing market," Journal of Urban Economics, Elsevier, vol. 117(C).
    20. Eerola, Essi & Lyytikäinen, Teemu, 2015. "On the role of public price information in housing markets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 74-84.
    21. Richard G. Newell & Juha Siikamäki, 2014. "Nudging Energy Efficiency Behavior: The Role of Information Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 555-598.
    22. Mark A. Andor, Andreas Gerster, and Stephan Sommer, 2020. "Consumer Inattention, Heuristic Thinking and the Role of Energy Labels," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    23. Hårsman, Björn & Daghbashyan, Zara & Chaudhary, Parth, 2016. "On the Quality and Impact of Residential Energy Performance Certificates," Working Paper Series in Economics and Institutions of Innovation 429, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    24. Austin Troy & Jeff Romm, 2004. "Assessing the price effects of flood hazard disclosure under the California natural hazard disclosure law (AB 1195)," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 47(1), pages 137-162.
    25. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
    26. Alecia Cassidy, 2023. "How Does Mandatory Energy Efficiency Disclosure Affect Housing Prices?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(3), pages 655-686.
    27. Rodolfo Sejas-Portillo & David Comerford & Mirko Moro & Till Stowasser, 2020. "Limited Attention in the Housing Market: Threshold Effects of Energy-Performance Certificates on Property Prices and Energy-Efficiency Investments," CESifo Working Paper Series 8669, CESifo.
    28. Jensen, Ole Michael & Hansen, Anders Rhiger & Kragh, Jesper, 2016. "Market response to the public display of energy performance rating at property sales," Energy Policy, Elsevier, vol. 93(C), pages 229-235.
    29. Wang, Zhenxuan & Zhang, Junjie, 2023. "The value of information disclosure: Evidence from mask consumption in China," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    30. Xie, Tingting & Yuan, Ye & Zhang, Hui, 2023. "Information, awareness, and mental health: Evidence from air pollution disclosure in China," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carroll, James & Denny, Eleanor & Lyons, Ronan C. & Petrov, Ivan, 2024. "Better energy cost information changes household property investment decisions: Evidence from a nationwide experiment," Energy Economics, Elsevier, vol. 139(C).
    2. Khazal, Aras & Sønstebø, Ole Jakob, 2020. "Valuation of energy performance certificates in the rental market – Professionals vs. nonprofessionals," Energy Policy, Elsevier, vol. 147(C).
    3. Taruttis, Lisa & Weber, Christoph, 2022. "Estimating the impact of energy efficiency on housing prices in Germany: Does regional disparity matter?," Energy Economics, Elsevier, vol. 105(C).
    4. Reusens, Peter & Vastmans, Frank & Damen, Sven, 2023. "A new framework to disentangle the impact of changes in dwelling characteristics on house price indices," Economic Modelling, Elsevier, vol. 123(C).
    5. Andreas Mense, 2018. "The Value of Energy Efficiency and the Role of Expected Heating Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(3), pages 671-701, November.
    6. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    7. Ou, Yunbei & Bailey, Nick & McArthur, David Philip & Zhao, Qunshan, 2024. "The Price Premium of Residential Energy Performance Certificates: A Scoping Review of the European Literature," OSF Preprints bm9xk, Center for Open Science.
    8. Copiello, Sergio, 2017. "Building energy efficiency: A research branch made of paradoxes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1064-1076.
    9. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    10. Maria-Francisca Cespedes-Lopez & Raul-Tomas Mora-Garcia & V. Raul Perez-Sanchez & Juan-Carlos Perez-Sanchez, 2019. "Meta-Analysis of Price Premiums in Housing with Energy Performance Certificates (EPC)," Sustainability, MDPI, vol. 11(22), pages 1-59, November.
    11. Florian Fizaine Fizaine & Pierre Voye & Catherine Baumont, 2018. "Les études hédoniques soutiennent-elles une valeur verte élevée dans le bâtiment ? Une réponse par la méta-analyse," Post-Print halshs-01957447, HAL.
    12. Taruttis, Lisa & Weber, Christoph, 2020. "Estimating the impact of energy efficiency on housing prices in Germany: Does regional disparity matter?," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224582, Verein für Socialpolitik / German Economic Association.
    13. Geske, Joachim, 2022. "The value of energy efficiency in residential buildings – a matter of heterogeneity?!," Energy Economics, Elsevier, vol. 113(C).
    14. Daniel Broxterman & Tingyu Zhou, 2023. "Correction to: Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 299-299, February.
    15. Carolin Pommeranz & Bertram Ingolf Steininger, 2018. "Willingness or Market Power: What Induces Tenants to Pay for Energy Efficient Housing?," ERES eres2018_134, European Real Estate Society (ERES).
    16. Luisa Dressler & Elisabetta Cornago, 2017. "The Rent Impact of Disclosing Energy Performance Certificates: Energy Efficiency and Information Effects," Working Papers ECARES ECARES 2017-16, ULB -- Universite Libre de Bruxelles.
    17. repec:osf:osfxxx:bm9xk_v1 is not listed on IDEAS
    18. Federico Dell’Anna & Marina Bravi & Carlos Marmolejo-Duarte & Marta Carla Bottero & Ai Chen, 2019. "EPC Green Premium in Two Different European Climate Zones: A Comparative Study between Barcelona and Turin," Sustainability, MDPI, vol. 11(20), pages 1-21, October.
    19. Cespedes-Lopez, Maria-Francisca & Perez-Sanchez, V. Raul & Mora-Garcia, Raul-Tomas, 2022. "The influence of housing location on energy ratings price premium in Alicante, Spain," Ecological Economics, Elsevier, vol. 201(C).
    20. Lisa Taruttis & Christoph Weber, 2020. "Estimating the impact of energy efficiency on housing prices in Germany: Does regional disparity matter?," EWL Working Papers 2004, University of Duisburg-Essen, Chair for Management Science and Energy Economics.
    21. Evangelista, Rui & Ramalho, Esmeralda A. & Andrade e Silva, João, 2020. "On the use of hedonic regression models to measure the effect of energy efficiency on residential property transaction prices: Evidence for Portugal and selected data issues," Energy Economics, Elsevier, vol. 86(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhouse:v:67:y:2025:i:c:s1051137725000026. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622881 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.