The Impact of Green Building Labels on the Price of Housing: Evidence from China
This paper focuses on the willingness to pay for green housing in China. First, we introduce green building related labels in China and briefly discuss the consumers’ incentives to buy this kind of building. Second, with the available transaction data in Shanghai, a hedonic regression model is applied to investigate whether or not a price premium in the residential market exists. Furthermore, we use the nonparametric matching model under a treatment framework to see the robustness of our results. The empirical result shows there exists a significant price premium in China. However, the premium does not increase with quality certification tiers. That may imply that homebuyers in China are not sensitive to the differences among green buildings although they are willing to pay a higher price for this newly emerging energy-saving building. And we also give the explanation why this has happened.