Which “Greenness” is Valued? Evidence from Green Condominiums in Tokyo
AbstractThis is one of the first researches on price differentials of green buildings in Asia. Using a rich set of data on condominium transactions and mandatory evaluation of environmental performance in Tokyo, we estimate the effects of itemized green scores on transaction prices. Although green condominiums are on average traded at a premium, the premium is mainly attributed to the building age and quality. After controlling for relevant attributes, we find significant price discounts for newly constructed green condominiums. However, green condominiums experience little depreciation at least during the initial years. Using itemized scores, we find that the long-life design mitigates price discounts, but other factors such as the use of eco-friendly materials, renewable energy, water reuse, and greening exacerbate discounts. Several possibilities are discussed including high future maintenance costs of green condominiums.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23124.
Date of creation: 26 Mar 2010
Date of revision: 02 Jun 2010
sustainability; green building; hedonic pricing; transaction price; residential real estate; Japan;
Find related papers by 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
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-ENE-2010-06-18 (Energy Economics)
- NEP-ENV-2010-06-18 (Environmental Economics)
- NEP-URE-2010-06-18 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eichholtz, Piet & Kok, Nils & Quigley, John M., 2009.
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- Fuerst, Franz & McAllister, Patrick, 2008.
"Green Noise or Green Value? Measuring the Price Effects of Environmental Certification in Commercial Buildings,"
11446, University Library of Munich, Germany, revised Sep 2008.
- Franz Fuerst & Patrick McAllister, 2008. "Green Noise or Green Value? Measuring the Price Effects of Environmental Certification in Commercial Buildings," Real Estate & Planning Working Papers rep-wp2008-09, Henley Business School, Reading University.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- ¿Se valora más un edificio certificado como eficiente?
by Ana Ramos in Economics for Energy on 2012-05-11 07:57:00
- 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.
- Franz Fuerst & Pat McAllister, . "The Impact of Energy Performance Certificates on the Rental and Capital Values of Commercial Property Assets: Some Preliminary Evidence from the UK," Real Estate & Planning Working Papers rep-wp2011-10, Henley Business School, Reading University.
- Franz Fuerst & Constantine Kontokosta & Pat McAllister, 2011. "Taking the LEED? Analyzing Spatial Variations in Market Penetration Rates of Eco-Labeled Properties," Real Estate & Planning Working Papers rep-wp2011-01, Henley Business School, Reading University.
- Chowdhury, Tasnim & Datta, Rajib & Mohajan, Haradhan, 2013. "Green finance is essential for economic development and sustainability," MPRA Paper 51169, University Library of Munich, Germany, revised 09 Jun 2013.
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