Different grades and different green premiums: a cross sectional analysis of a green certification scheme

Green certification is often hailed as an effective means of resolving information asymmetry by providing prospective buyers with credible proof of a property's level of quantitative sustainability performance. These certification schemes are also considered as providing the credible identifica...

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Published inPacific rim property research journal Vol. 26; no. 3; pp. 207 - 221
Main Authors Wadu Mesthrige, Jayantha, Oladinrin, O.T., Javed, A.A.
Format Journal Article
LanguageEnglish
Published Routledge 01.09.2020
Subjects
beam plus scheme
green buildings
Green certification
Hong Kong
rating system
residential property
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Abstract Green certification is often hailed as an effective means of resolving information asymmetry by providing prospective buyers with credible proof of a property's level of quantitative sustainability performance. These certification schemes are also considered as providing the credible identification labels needed to generate a market premium. This study analysed whether different market premiums (financial implications) exist across different ratings of the HK-BEAM certification scheme. The paper used hedonic price model (HPM) to evaluate the influence of green certification rating levels on residential property prices in Hong Kong. The results indicate, on average, that HK-BEAM certification increases price values by between 5.3% and 6.7%. Most importantly, the results indicate that significant price premium differences exist across the different ratings available for HK-BEAM certified buildings. The findings provide strong proof of the existence of a premium across ratings.
AbstractList Green certification is often hailed as an effective means of resolving information asymmetry by providing prospective buyers with credible proof of a property's level of quantitative sustainability performance. These certification schemes are also considered as providing the credible identification labels needed to generate a market premium. This study analysed whether different market premiums (financial implications) exist across different ratings of the HK-BEAM certification scheme. The paper used hedonic price model (HPM) to evaluate the influence of green certification rating levels on residential property prices in Hong Kong. The results indicate, on average, that HK-BEAM certification increases price values by between 5.3% and 6.7%. Most importantly, the results indicate that significant price premium differences exist across the different ratings available for HK-BEAM certified buildings. The findings provide strong proof of the existence of a premium across ratings.
Author Wadu Mesthrige, Jayantha
Oladinrin, O.T.
Javed, A.A.
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Snippet Green certification is often hailed as an effective means of resolving information asymmetry by providing prospective buyers with credible proof of a...
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SubjectTerms beam plus scheme
green buildings
Green certification
Hong Kong
rating system
residential property
Title Different grades and different green premiums: a cross sectional analysis of a green certification scheme
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