Conference: ERES 2018 hosted by Henley Business School, University of Reading, UK

This paper is the first to investigate actor heterogeneity in the rental market through EPC-label valuation, using 441,123 residential rental observations. Applying a hedonic Hierarchical Linear Model, we find evidence that labeled dwellings have a premium compared with non-labeled dwellings, and that the premium is increasing with a higher EPC-label. Notably, the results provide evidence of actor heterogeneity. We define two classes of actor, real estate agents and owners of dwellings offering their dwellings for rent without using a real estate agent, hereafter called homeowners. We find that real estate agents assign strictly higher rental premiums than homeowners for dwellings with the same characteristics and EPC-label. Controlling for this, we find that the most of the price difference is driven by the EPC valuation, providing evidence that market actor heterogeneity leads to rental prices biased upwards by real estate agents who have up-biased EPC valuations relative to those of homeowners.