The Effects of Multiple Green Factors on Condominium Prices

30 Pages Posted: 10 Jul 2010 Last revised: 26 Jan 2016

See all articles by Jiro Yoshida

Jiro Yoshida

Pennsylvania State University - Smeal College of Business; The University of Tokyo - Graduate School of Economics

Ayako Sugiura

Tokyo Association of Real Estate Appraisers

Date Written: December 23, 2013

Abstract

This paper analyzes the transaction prices of green buildings assessed on the basis of multiple green factors. Our theoretical model demonstrates that the initial green premium can be negative but becomes positive as the building ages if a green building has a higher life-cycle cost and a longer economic life. Our empirical analysis of green condominiums in Tokyo confirms this prediction. We additionally find that the longer-life design is associated with a price premium, but the use of renewable energy and recycled materials and water is associated with price discounts. The price discounts are interpreted as the capitalization of a greater life-cycle user cost.

Keywords: sustainability, green building, hedonic pricing, property price, residential real estate, Japan

JEL Classification: Q51, R21, R31

Suggested Citation

Yoshida, Jiro and Sugiura, Ayako, The Effects of Multiple Green Factors on Condominium Prices (December 23, 2013). Journal of Real Estate Finance and Economics, Vol. 50, No. 3, 2015. Available at SSRN: https://ssrn.com/abstract=1636426 or http://dx.doi.org/10.2139/ssrn.1636426

Jiro Yoshida (Contact Author)

Pennsylvania State University - Smeal College of Business ( email )

368 Business Building
Smeal College of Business
University Park, PA 16802
United States
814-865-0392 (Phone)
814-865-6284 (Fax)

HOME PAGE: http://www.personal.psu.edu/juy18

The University of Tokyo - Graduate School of Economics ( email )

7-3-1 Hongo
Bunkyo-ku, Tokyo 113-0033
Japan
813-5841-5653 (Phone)
813-5841-5521 (Fax)

Ayako Sugiura

Tokyo Association of Real Estate Appraisers ( email )

Tokyo
Japan

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