Luisa Dressler, "Econometric analysis of the effect of energy performance certificates on rents in the Region of Brussels"
Energy performance certification is argued to solve information asymmetries between landlords and tenants with respect to the energy consumption of a building and to tackle the current challenge of underinvestment in insulation of rented property. This paper estimates the rent premiums associated to advertised EPC scores in Brussels, where EPC is compulsory in rental ads since November 2011. To estimate these premiums, we apply a hedonic price regression and estimate a Heckman selection model using a cross-sectional dataset of residential rental ads posted in Brussels in 2010-2014. Our preliminary results suggest that a certified and highly energy-efficient dwelling can earn a rent premium of 4.4% compared to a certified but energy-inefficient one. These results indicate that policies of compulsory information disclosure can be appropriate tools to solve information asymmetries about energy performance in the building sector.