Green Buildings: Similar to Other Premium Buildings?

Posted: 21 Jan 2016

See all articles by Spenser J. Robinson

Spenser J. Robinson

Central Michigan University - College of Business Administration

Andrew Sanderford

University of Arizona

Date Written: January 20, 2016

Abstract

The statistics, finance, and real estate literature regularly rely on propensity score matching techniques to balance samples of data where randomized treatment assignment is not possible. In the sustainable commercial real estate literature the technique has seen substantive use. To analyze price and rent premiums for green buildings, several studies have used propensity scores to ensure samples that contains eco-labeled and un-labeled buildings reflect a randomized assignment of the treatment. Underpinning the argument for the use of propensity scores is the notion that green buildings contain similar attributes to non-green buildings. However, if the green labels were ignored, would premium buildings be otherwise statistically similar to premium buildings in the market? Here, we analyze a research question focusing on the extent to which propensity scores can predict a green building using the standard building attributes and whether propensity scoring is an econometric necessity?

Keywords: Propensity scoring; Sustainable commercial real estate; Green building & Econometrics

Suggested Citation

Robinson, Spenser J. and Sanderford, Andrew, Green Buildings: Similar to Other Premium Buildings? (January 20, 2016). Journal of Real Estate Finance and Economics, Vol. 52, No. 2, 2016, Available at SSRN: https://ssrn.com/abstract=2719151

Spenser J. Robinson

Central Michigan University - College of Business Administration ( email )

Mt. Pleasant, MI 48858
United States

Andrew Sanderford (Contact Author)

University of Arizona ( email )

Department of History
Tucson, AZ 85721
United States

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