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Energy Performance Certification in the Housing Market

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The adoption and effects of energy performance certification in Europe are analysed. Dutch housing market is used as a laboratory, with a unique data set that covers more than 100,000 dwelling transactions in 2008. Results show that when energy certification is not mandatory, adoption rates are low and clustered among young, well-kept single-family dwellings, located in regions where competition among buyers is low. Tracking the transaction process of the certified dwellings in the sample, a significant price premium is found for green energy labels. This analysis is robust to the inclusion of various dwelling characteristics, including quality of isolation and maintenance of the interior. Thess results provide a first indication that consumers recognize the added value of buying an energy-efficient home.