ARE HOUSEHOLDS WILLING TO PAY FOR GREEN BUILDINGS? AN EMPIRICAL STUDY OF THE SWISS MINERGIE LABEL
||Salvi, Marco; Horehájová, Andrea; Syz, Juerg
||ARE HOUSEHOLDS WILLING TO PAY FOR GREEN BUILDINGS? AN EMPIRICAL STUDY OF THE SWISS MINERGIE LABEL
||17th Annual European Real Estate Society Conference in Milan, Italy
||The paper provides one of the first empirical studies of the willingness to pay of renters and owner-occupiers for ""green buildings"". We match publicly available information on the addresses of 15'000 apartments and single-family homes which have received the Swiss energy label ""Minergie"" with two databases. The first database is provided by homegate.ch, the largest internet quotation service in Switzerland. We are able to match 1'500 Minergie rental apartments and to build a control group of around 11'000 newly built conventional (i.e. non-Minergie) apartments. The second database is provided by a large Swiss mortgage bank. It contains detailed information about the characteristics and price of 25'000 transactions of owner-occupied housing that occurred in the Zurich metropolitan region. We are able to recover 300 transactions of Minergie condominium apartments and single-family homes. For the buildings in the two samples located in the Zurich area we use a powerful GIS to subsequently match a large set of location characteristics. These include variables related to topography (aspect, orientation, view), accessibility (travel time to the CBD by car and public transportation, distances to local bus stops, distance to major roads), local amenities (road traffic noise, airport noise etc.) and various neighbourhood characteristics. We find that both Swiss owner-occupiers and renters are willing to pay a significant premium for green buildings. Minergie rentals command a premium of about five percent over conventional buildings – controlling for the quality and specific location of the apartments. The transaction price of Minergie condominiums is 3.5 percent higher, ceteris paribus, while single-family homes command a premium of about seven percent. In addition to these results we investigate the determinants of the spatial distribution of Minergie dwellings in Switzerland. We study where Minergie certified buildings cluster. By creating a measure of community environmentalism based on votes on four national referenda we are able to test several hypothesis regarding the demand for environmental goods. We conclude that income and ""cultural"" (i.e. language) differences across communities account for the larger part of the variation in green building demand. The impact of political affiliation and demographic factors, although statistically significant, is less important.
||Green buildings, hedonic model, rents, Switzerland
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||Green Buildings & Environmental Policies (5)
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