The information value of energy labels: A quasi-experimental approach

Promoting energy efficiency in the residential housing sector is a policy objective of increasing importance. In this paper, I assess the effectiveness of energy labels in the resi dential housing sector of Netherlands from 2008 to 2017. Hedonic pricing models, commonly used in the literature, find large transaction price premiums for dwellings with better energy labels. However, this result is sensitive to model specifications. Hence, the premiums cannot be causally attributed to energy labels. Addressing the shortcomings of this methodology, I construct a Regression Discontinuity Design model (RDD). The energy index, which deter mines the energy labels, is used to compare similar dwellings with different energy labels. The RDD estimates provide no evidence for significant price premiums due to energy labels. These findings suggest that energy labels do not represent information valued in the market and question the need for this type of information policy.