My dissertation titled, "Information Disclosure: Applications in Energy Economics," is comprised of three chapters, each based on a mandatory disclosure policy in Portland, Oregon that requires sellers to obtain and publish a home energy score assessment in real estate listings prior to selling a home. This assessment provides a variety of information about energy efficiency. In chapter 1, I examine the supply of information, studying compliance with the policy. In chapter 2, I examine the demand of information, estimating the premium for energy efficiency. In chapter 3, I evaluate changes in energy efficiency from 1900 to 2020. In doing so, I examine whether current racial disparities in energy costs can be explained by discriminatory housing policies like redlining.Chapter 1: "Is Mandatory Disclosure Really Mandatory? Evidence from Energy Assessments" When buying and selling a home, there is asymmetric information about energy efficiency, as sellers tend to have more information. To address this problem, cities across the United States have begun to adopt mandatory disclosure policies. Similar to other settings with mandatory disclosure, the policy in Portland suffers from non-compliance: 64\% of sellers obtain an assessment, and 72\% of these sellers publish the assessment (46\% overall). To understand the causes of non-compliance, I develop a theoretical model, evaluating the seller's disclosure decision. Using administrative assessment data and proprietary housing transaction data, I test hypotheses from the model. Consistent with the theory of asymmetric information, I show that sellers act strategically, as they are more likely to obtain and publish an assessment if their home is efficient. This behavior was exacerbated with the COVID-19 pandemic when the city reduced enforcement, suspending fines for non-compliance. Surprisingly, there is not full compliance among the most efficient homes. This suggests that there is a coordination problem between sellers and realtors. There is also heterogeneity by realtor, as experienced realtors are more likely to publish the assessment. Chapter 2: "What Energy Information Matters to Home Buyers?" Created by the U.S. Department of Energy, the home energy score is a discrete metric (1--10) of energy efficiency. The score allows buyers to evaluate the energy efficiency level of a home prior to purchase. In this paper, I examine the sales price premium for energy efficiency, as measured by the score. I estimate a premium of about 0.50\% ( \$2,929) for a one unit increase in the score, which is roughly equivalent to the present discounted value of the corresponding energy cost savings over a 30-year mortgage (\$2,734). Since the premium for the score is greater than the energy cost savings, there is not an energy efficiency gap. The premium for the score varies with housing attributes, as it is greater when there is more uncertainty about energy efficiency, for example, in old homes. In addition to the score, the assessment includes other energy metrics like energy consumption, energy costs, and carbon emissions. I find that buyers respond more heavily to the score, as the premium for the score is greater than the other metrics. Since the score is a function of the other metrics, it provides less information than the underlying metrics. Thus, the results suggest that simple discrete metrics may be easier for consumers to comprehend than continuous metrics.Chapter 3: "The Evolution of Energy Efficiency: Impacts (or lack thereof) of Redlining and the Fair Housing Act" While minority households face higher energy costs relative to white households, the mechanisms for this gap are not clear. One possible explanation is differences in the housing stock. In this paper, I examine to what extent the current housing stock is a reflection of past housing policies, especially those that are based on discriminatory behavior like redlining. If the redlining maps were binding, introducing credit constraints, homeowners may not have been able to invest in efficient technologies, like insulation, resulting in lower levels of energy efficiency. Using a difference-in-differences design, I examine the evolution of energy efficiency for homes constructed between 1900 and 2020, focusing on the introduction of the redlining maps. Similarly, I consider the Fair Housing Act of 1968. I find that these housing policies did not impact the gap in energy efficiency between redlined and non-redlined areas. Likewise, using a spatial regression discontinuity design, I find no gap in energy efficiency at the boundaries of these maps. Meanwhile, at the city level, I observe widespread improvements in energy efficiency after the introduction of state building codes in the 1970s, with the majority of improvements coming from insulation.
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