W i l l G r e e n B u i l d i n g s b e A p p r o p r i a t e l y V a l u e d b y t h e M a r k e t ?
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In order to assess the impact of green labels on housing price, the following three
estimation models are used:
Model 1
log
, ,
=
0
+
1
+ �
2 ,
+�
3
+�
4
+�
5
+
6
+
8
+
,
(4)
Where
PC
i,j,t
: Price of condominium unit j in apartment building i at time t
FS
j
：
Floor area of condominium unit j (square meters)
G
i
：
Green label for apartment building i
X
i,jn
：
Architectural and locational characteristics of condominium unit j in apartment
building i (n-th characteristics)
A
kn
：
Characteristics of the ambient environment in region k (n-th characteristics)
C
l n
：
Characteristics of the spatial environment in region l (n-th characteristics)
TD
t
: Time dummy (
t
= years 2005 to 2009)
TrD
j
：
Transaction dummy (1 for transaction price, 0 for asking price)
In Model 2, a cross term of
and
TD
is added to determine how the effect of green
labels changes over time.
Model 2
log
, ,
=
0
+�
1
+�
2 ,
+�
3
+�
4
+�
5
+
6
+�
1
+
,
(5)
3.4. Estimation results
The estimation results are shown in Table. For both models, the determination
coefficient adjusted for degrees of freedom was as favorable as 0.845. Also, the
estimation results were consistent with expected results for each estimated variable.
First, Model 1 showed that asking prices were around 4.7 percent higher for
condominiums with green labels. The effect of green labels was determined after
controlling for the effects of all factors, such as the building’s size, quality, location and
ambient environment, the condominium unit’s characteristics, the time of transaction, the
developer, and the constructor. Developers must have made additional investments to
enhance the buildings’ environmental performance; the reason was shown to be that
they anticipated higher selling prices.
