||This paper is the first to empirically investigate the diffusion of energy labels in the European Union. We address the drivers of the adoption of energy performance certificates and the consequent wealth effects on the housing market. To this end, we use the Netherlands as a laboratory, with a sample of more than 100,000 transacted dwellings in 2008, of which a mere 20,000 had an energy performance certificate. The results show that the choice of certification is driven to a large extent by the quality of a dwelling. Older dwellings in a more competitive segment and less attractive region are significantly more likely to have an energy performance certificate. However, within the sample of certified buildings, we find a positive relation between the energy efficiency of a dwelling and its transaction price, corrected for locational and quality characteristics. The results and implications of this paper can be used by governments in other Member States and countries outside the European Union to increase the effectiveness of policies regarding energy efficiency measures and energy performance certification.