Sammendrag
This paper is the first to investigate the relationship between the energy efficiency
of dwellings, measured by the energy performance certificate (EPC), and utility
cost inclusion in rental prices. First, we investigate potential drivers behind the
decision to include utility costs in rents. We find that labeled dwellings are more
likely to include utility costs and that this likelihood is higher among energy-efficient
dwellings than among inefficient dwellings. Next, we surprisingly find that
utility costs seem to be under-capitalized in energy-inefficient dwellings. These
results are confirmed with the counterfactual decomposition approach. Overall,
the findings indicate that the EPC labeling policy may be important for both landlord
and tenant decision-making and may enhance market efficiency.
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