Green diffusion: Determining the diffusion process of green buildings in the US

As the building and real estate sector is responsible for about 40% of the economyís end energy consumption, its potential to contribute to a sustainable development is accordingly high. In terms of mitigation of climate change, the response of the property sector is expressed by the diffusion of Green Buildings with systematic spatial and temporal dispersion patterns. Considering Green Buildings as a new innovation in the real estate market, it is necessary to analyse the adoption steps in order to identify the drivers of this green development. The question is what leads the actors of the real estate industry to adopt the green innovation in their investment decisions in terms of constructing, renting or investing in Green Buildings. This paper provides evidence of the factors determining the diffusion of Green Buildings in the US market by gathering building specific, economic and behavioural data. In other words, if the chosen model and its assumptions fit positively, the determinants may contribute to identify temporal and spatial effects across several real estate submarkets. The expected drivers are manifold: on the one hand governmental policies and on the other hand latent private interest due to a possible direct pay-off or an increased willingness to pay. Our contribution to research literature is to provide evidence of the market response to previous green policy incentives and delivers a basis for future decisions by policy-makers and investors.