Conference Agenda

We study how segmented rental markets shape the incidence of residential energy-price increases. Using German rental listings from 2015 to 2024, we estimate how higher residential energy prices affect posted net rents for dwellings with different energy requirements across rental-market segments. Net rents fall substantially for more energy-intensive dwellings in high-rent segments, but adjust little in low-rent segments. Evidence from applications and listing duration suggests that this gradient reflects tighter markets and less elastic demand with respect to total housing costs in lower-rent segments. Applying the estimates to projected carbon-price increases in residential fuels, lower-income households face housing-cost increases relative to income up to six times larger than those of higher-income households.

Air pollution is widely recognized as a source of significant economic costs and health risk (Landrigan et al., 2018), yet limited research has investigated its short-term impacts on financial decision-making, especially in real estate markets. To bridge this gap, we use data from open-air residential real estate auctions in Australia to investigate whether air quality on the day of an auction affects the final sale price. Using an IV approach that exploits thermal inversion, we find that higher pollution levels on auction days significantly increase prices by between 0.61% and 0.98%, controlling for property characteristics, weather, and other factors. Although this finding contradicts standard rational economic theory, it is consistent with explanations based on cognitive impairment (Shiv and Fedorikhin, 1999; Kahneman, 2011) and relative thinking (Qin et al., 2019). The results are not driven by pollution autocorrelation or by superior property characteristics in more polluted areas. This study makes two main contributions. First, it estimates the impact of pollution in a competitive outdoor auction setting, where bidders are directly exposed to ambient air and prices are not determined through bilateral negotiation. Second, it examines the persistence of behavioral biases in a developed, low-pollution economy, whereas prior research has largely focused on developing countries.

Household adoption of energy efficiency measures has been deemed slower than expected, because households misjudge the private benefits of these investments. A key challenge in evaluating this factor is that most studies only observe outcomes for households who choose to adopt. We study a unique setting in the Dutch social housing sector where retrofits are implemented after tenant majority approval, meaning both supporters and non-supporters experience the home upgrade. Using linked survey and administrative household level data, we examine household expectations and experiences across those with different initial support for the retrofit. We find that support predicts the outcome of the retrofit, with supporters achieving nearly 20% higher gas savings than non-supporters. Households are generally accurately anticipating the consequences of the retrofit, with non-supporters forming the most accurate expectations. Policies that acknowledge and address this variation through tailored approaches may improve participation and accelerate the residential energy transition.