The Valuation of Energy Efficiency Labels in the French Housing Market

This study assesses the effect of energy efficiency labels on the private housing market using information on energy efficiency assessments of housing and property transactions in France between 2016 and 2021. We take into consideration two energy labels assigned to dwellings, one that calculates energy efficiency based on energy consumption and the other on greenhouse gas emissions. The results of the hedonic regressions show that having a higher efficiency rating has a significantly positive effect on housing prices. We also show that this effect increases with the number of annual heating degree days of the locality of the dwelling, indicating the importance of the energy-saving aspect in the market valuation of energy-efficient housing. Finally, using regression discontinuity estimates, we differentiate between the effect of the cognitive perception of labels and of the real energy efficiency gain on housing prices. Our findings reveal that the cognitive effect is predominantly observed in the least efficient dwellings.