Marie Gauthier

Abstract:

In this article, we examine the impact of a French policy that arbitrarily modified the thresholds used to define property energy labels, providing a natural experiment to assess the effect of simplified information on agents’ decision-making. In France, energy labels include information on energy efficiency (EE) through a score expressed in kWhep/m2/year, which is mapped onto color-coded rating bands (A-G). The arbitrary changes in the definition of these rating bands introduced by the 2021 French reform allow us to apply a difference-in-differences strategy to estimate the causal impact of a letter change on housing prices. Applying this strategy to 1.5 million property transaction between 2013 and 2023, we provide strong evidence that buyers’ decision-making is significantly influenced by simplified information, such as letter grades. We also provide evidence of the influence of letters on seller behavior.

– Séminaire organisé par le programme 4 / BSE –