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The nascent market for “green” real estate in Beijing

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

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.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 56 (2012)
Issue (Month): 5 ()
Pages: 974-984

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Handle: RePEc:eee:eecrev:v:56:y:2012:i:5:p:974-984
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  1. Zheng, Siqi & Fu, Yuming & Liu, Hongyu, 2006. "Housing-choice hindrances and urban spatial structure: Evidence from matched location and location-preference data in Chinese cities," Journal of Urban Economics, Elsevier, vol. 60(3), pages 535-557, November.
  2. Deng, Yongheng & Li, Zhiliang & Quigley, John M., 2012. "Economic returns to energy-efficient investments in the housing market: Evidence from Singapore," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 506-515.
  3. K. Chau & S. Wong & C. Yiu, 2007. "Housing Quality in the Forward Contracts Market," The Journal of Real Estate Finance and Economics, Springer, vol. 34(3), pages 313-325, April.
  4. Daron Acemoglu & Joshua Linn, 2004. "Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry," Levine's Working Paper Archive 228400000000000002, David K. Levine.
  5. Zheng, Siqi & Kahn, Matthew E., 2008. "Land and residential property markets in a booming economy: New evidence from Beijing," Journal of Urban Economics, Elsevier, vol. 63(2), pages 743-757, March.
  6. Yoshida, Jiro & Sugiura, Ayako, 2010. "Which “Greenness” is Valued? Evidence from Green Condominiums in Tokyo," MPRA Paper 23124, University Library of Munich, Germany, revised 02 Jun 2010.
  7. Eichholtz, Piet & Kok, Nils & Quigley, John M., 2009. "Doing Well by Doing Good? Green Office Buildings," Berkeley Program on Housing and Urban Policy, Working Paper Series qt507394s4, Berkeley Program on Housing and Urban Policy.
  8. Siqi Zheng & Rui Wang & Edward L. Glaeser & Matthew E. Kahn, 2011. "The greenness of China: household carbon dioxide emissions and urban development," Journal of Economic Geography, Oxford University Press, vol. 11(5), pages 761-792, September.
  9. Yongheng Deng & Della Zheng & Changfeng Ling, 2005. "An Early Assessment of Residential Mortgage Performance in China," The Journal of Real Estate Finance and Economics, Springer, vol. 31(2), pages 117-136, September.
  10. Matthew E. Kahn, 2002. "Demographic change and the demand for environmental regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(1), pages 45-62.
  11. Joyce Dargay & Dermot Gately & Martin Sommer, 2007. "Vehicle Ownership and Income Growth, Worldwide: 1960-2030," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 143-170.
  12. Siqi Zheng & Jing Cao & Matthew E. Kahn, 2011. "China's Rising Demand for "Green Cities": Evidence from Cross-City Real Estate Price Hedonics," NBER Working Papers 16992, National Bureau of Economic Research, Inc.
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