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The nascent market for “green” real estate in Beijing

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Listed:
  • Zheng, Siqi
  • Wu, Jing
  • Kahn, Matthew E.
  • Deng, Yongheng

Abstract

In recent years, formal certification programs for rating and evaluating the sustainability and energy efficiency of buildings have proliferated around the world. Developers recognize that such “green labels” differentiate products and allow them to charge a price premium. China has not formally adopted such rating standards. In the absence of such standards, developers are competing with each other based on their own self-reported indicators of their buildings’ “greenness”. We create an index using Google search to rank housing complexes in Beijing with respect to their “marketing greenness” and document that these “green” units sell for a price premium at the presale stage but they subsequently resell or rent for a price discount. An introduction of a standardized official certification program would help “green” demanders to acquire units that they desire and would accelerate the advance of China’s nascent green real estate market.

Suggested Citation

  • Zheng, Siqi & Wu, Jing & Kahn, Matthew E. & Deng, Yongheng, 2012. "The nascent market for “green” real estate in Beijing," European Economic Review, Elsevier, vol. 56(5), pages 974-984.
    • Handle: RePEc:eee:eecrev:v:56:y:2012:i:5:p:974-984
    DOI: 10.1016/j.euroecorev.2012.02.012
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    References listed on IDEAS

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    More about this item

    Keywords

    Green building; Energy efficiency; Environmental sustainability; Information asymmetry; CHINA housing market;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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