Determinants of Green Building Adoption

30 Pages Posted: 16 Apr 2011 Last revised: 4 Dec 2013

See all articles by Franz Fuerst

Franz Fuerst

University of Cambridge - Department of Land Economy; University of Melbourne; City University of New York - Center for Urban Research

Constantine E. Kontokosta

New York University - Center for Urban Science and Progress; New York University (NYU) - Marron Institute of Urban Management

Patrick M. McAllister

University of Reading - Department of Real Estate and Planning

Date Written: April 6, 2011

Abstract

This paper investigates variations in the adoption of LEED-certified commercial buildings across 174 CBSA in the United States. Drawing upon a unique database and using a robust analytical framework, the determinants of the proportion LEED-certified space are modeled. We find that, despite high growth rates, LEED-certified stock accounts for a relatively small proportion of total commercial stock. The average proportion is less than 1%. A further contribution of the paper is that our concentration measure avoids the biases associated with simple percentage measures that were used in previous studies of this topic. Strongest predictors of the proportion of LEED-certified commercial space in a local market are market size, educational attainment and economic growth. In terms of policy effectiveness, it is found that only a mandatory requirement to obtain LEED-certification for new buildings has a significant positive effect on market penetration.

Keywords: energy efficiency, LEED, real estate, innovation diffusion, eco-labeling

JEL Classification: D12, Q51, R33

Suggested Citation

Fuerst, Franz and Kontokosta, Constantine E. and McAllister, Patrick M., Determinants of Green Building Adoption (April 6, 2011). Available at SSRN: https://ssrn.com/abstract=1808723 or http://dx.doi.org/10.2139/ssrn.1808723

Franz Fuerst (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

HOME PAGE: http://www.landecon.cam.ac.uk/directory/dr-franz-fuerst

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

City University of New York - Center for Urban Research

CUNY The Graduate Center
New York, NY 10011
United States

Constantine E. Kontokosta

New York University - Center for Urban Science and Progress ( email )

1 MetroTech Center
19th Floor
Brooklyn, NY 11201
United States

New York University (NYU) - Marron Institute of Urban Management ( email )

60 Fifth Ave
2nd Floor
New York, NY 10011
United States

Patrick M. McAllister

University of Reading - Department of Real Estate and Planning ( email )

Reading RG6 6AW
United Kingdom

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