Fuerst, Franz and McAllister, Patrick (2008): Green Noise or Green Value? Measuring the Price Effects of Environmental Certification in Commercial Buildings.
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The environmental performance of a building is rapidly gaining importance as a metric in real estate investments. This study investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. These are additional occupier benefits, lower holding costs for investors and a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. The results suggest that, compared to buildings in the same submarkets, eco-certified buildings have both a rental and sale price premium.
|Item Type:||MPRA Paper|
|Original Title:||Green Noise or Green Value? Measuring the Price Effects of Environmental Certification in Commercial Buildings|
|Keywords:||Green buildings, LEED, Energy Star certification, commercial real estate, appraisal, price premium, innovation diffusion|
|Subjects:||C - Mathematical and Quantitative Methods > C5 - Econometric Modeling
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C31 - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
M - Business Administration and Business Economics; Marketing; Accounting > M2 - Business Economics
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Production Analysis, and Firm Location > R33 - Nonagricultural and Nonresidential Real Estate Markets
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation
|Depositing User:||Franz Fuerst|
|Date Deposited:||10. Aug 2009 07:59|
|Last Modified:||13. Feb 2013 20:56|
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Green Noise or Green Value? Measuring the Price Effects of Environmental Certification in Commercial Buildings. (deposited 08. Nov 2008 04:40)
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