This thesis should analyze advertising behavior of house sellers who are by law required to publish Energy Performance Certificates of the offered houses. In the case of PENB certificates, however, the mandatory disclosure rule allows sellers to effectively hide the information by announcing that the certificate is not yet ready. The thesis should discuss the behavior and find a simple theoretical model of the behavior. Second, and more importantly, the thesis should build an original dataset of house offers where this behavior is detected, preferably by exploiting the richest database on the market, Sreality.cz, focusing on some specific thick house market (e.g., suburbs of Prague). The dataset should check two kinds of research questions: (i) What are determinants of the behavior, using possibly also variables not directly observed in the ad but accessible through Property Register or in any other way (e.g., owner location, access to infrastructure etc.)? (ii) What is the effect of non-disclosure on the posted price? The thesis could also look into EPC regulations in the other countries. It may also compare EPC with other verifiable/certifiable features of the houses. I would also like to know whether a sale is possible without EPC (if so, then there is an issue of ex post bargaining over the cost of EPC).
References
An introductory paper on mandatory and voluntary disclosure is as follows: Milgrom, P. (2008). What the seller won't tell you: Persuasion and disclosure in markets. The Journal of Economic Perspectives, 22(2), 115-131.
Preliminary scope of work
It is well known that markets force buyers who dispose with certificates (evidence) to voluntarily reveal the certificates. The idea is simple; once non-disclosure of a certificate is interpreted as the worst possibly quality of the good, each seller prefers to reveal his or her certificate. However, once ownership of a certificate is uncertain, buyers cannot impose such strongly disciplining beliefs, and consequently owners of certificates with low values are less motivated to hide the certificates. This is especially true when the certificate is costly. Interestingly, non-disclosure can occur even in the regime with mandatory disclosure as long as the law allows to make a statement that 'a certificate is not yet available, hence the good is preliminarily rated with the worst rate'. Then, the owners may effectively decide to not purchase the certificate. Exactly this phrase is observed in the case of EPC regulation of houses in the Czech housing market.
Preliminary scope of work in English
It is well known that markets force buyers who dispose with certificates (evidence) to voluntarily reveal the certificates. The idea is simple; once non-disclosure of a certificate is interpreted as the worst possibly quality of the good, each seller prefers to reveal his or her certificate. However, once ownership of a certificate is uncertain, buyers cannot impose such strongly disciplining beliefs, and consequently owners of certificates with low values are less motivated to hide the certificates. This is especially true when the certificate is costly. Interestingly, non-disclosure can occur even in the regime with mandatory disclosure as long as the law allows to make a statement that 'a certificate is not yet available, hence the good is preliminarily rated with the worst rate'. Then, the owners may effectively decide to not purchase the certificate. Exactly this phrase is observed in the case of EPC regulation of houses in the Czech housing market.
