Weather to pay attention to energy efficiency on the housing market

Energy efficiency improvements can play an important role in reducing emissions from residential buildings, yet consumer decisions involving energy costs can be subject to bounded rationality due to, e.g., inattention and myopia. We present evidence that long-term, high-stakes decisions in the housing market are influenced by short-term contextual factors. Using data on housing transactions through a large online platform in Germany, we document that houses purchased following unusually cold weather tend to be more energy efficient, while the reverse is not true for unusually warm weather. This asymmetry suggests that the effect of temperature fluctuations on energy efficiency demand maybe driven by salience of heating costs.