Mandatory energy efficiency disclosure policies and house prices

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.