Energy Performance Certificates (EPCs) are intended to provide tenants and buyers with reliable information about the energy performance of buildings. As improved energy performance may increase building sale prices and rents, the EPCs are supposed to generate incentives for owners to invest in energy efficiency. The empirical evidence for a price premium associated with energy labels is, however, inconclusive and partly contradictory. By utilizing data from the Norwegian housing market, we reproduce the positive price premium effect found in earlier studies. However, when we check these results by taking advantage of the fact that the introduction of a mandatory energy certification system represents a quasinatural experiment, we find no evidence of a price premium. On the contrary, we present evidence that there is no effect of the energy label itself.

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Johannesen, Jan Tore Solstad and one anonymous reviewers for critical and constructive comments on earlier drafts.We are also indebted to The European Commission for funding through the BIOECON project.