Better energy cost information changes household property investment decisions: Evidence from a nationwide experiment

With buildings accounting for roughly 40% of energy consumption in the US and Europe, energy efficiency upgrades will be central in meeting climate targets. Based on the hypothesis that there is imperfect information regarding the cost-saving implications of efficiency improvements, we add property-specific energy cost labels to sales advertisements in a randomized controlled trial covering the entire Irish housing market. This is the first energy framing field trial for property, the household s largest energy consuming investment and the household technology which likely has the highest variation in energy consumption due to heterogeneity in efficiency and size. Our analysis of over 31,000 transacted properties finds strong evidence that energy cost forecasts change homebuyer behaviour, with the energy efficiency premium increasing by 0.7 percentage points in treatment counties. We also find that more energy efficient properties sell faster and, for the first time, show that treatment further shortened this time-to-sell. While a major departure from existing property labelling policy, these results suggest that framing property energy efficiency according to cost implications rather than kilowatt-hours increases the demand for energy efficiency.