The information value of energy labels: Evidence from the Dutch residential housing market

This paper examines the information value of energy labels using administrative data on all transactions in the Dutch residential housing market from 2000 to 2017. Specifically, we assess whether energy labels provide additional information beyond what buyers can directly observe, and whether this information is capitalized into transaction prices. We compare the information value of two different labeling systems; one is complex and voluntary, and the other is simple and mandatory. Using a combination of hedonic pricing models and a sharp Regression Discontinuity Design, we find robust evidence that voluntary labels had limited information value from 2008 to 2014. The information value of the mandatory labels adopted since 2015 is less clear. Notably, better-labeled houses already attracted significant price premiums before they obtained energy labels, which implies that at least part of the price premium cannot be attributed to mandatory labels.