IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v129y2016icp40-49.html
   My bibliography  Save this article

The role of public information in increasing homebuyers' willingness-to-pay for green housing: Evidence from Beijing

Author

Listed:
  • Zhang, Li
  • Sun, Cong
  • Liu, Hongyu
  • Zheng, Siqi

Abstract

To explain the weak demand for green housing in Chinese cities, researchers point to the lack of reliable and accurate information to convince owners to invest, yet there is little concrete evidence that such information would in fact promote homebuyers' investment in green housing. We implement an information experiment in Beijing. We select two pairs of residential complexes – each pair has two complexes located in the same housing submarket, and one is green while the other is not. We ask the respondents' willingness to buy a new green housing unit, and, if yes, the price premium they are willing to pay. Then we show them an information card that documents that green apartments outperform their non-green counterparts in terms of several indoor environmental indicators, and then ask them the same two questions. We find that dwellers living in green complexes present a significantly higher initial willingness-to-pay for greenness, but this difference narrows significantly after our information treatment, as the non-green-complex dwellers' willingness-to-pay for greenness increases dramatically. This inspiring result suggests that Chinese urban households will be encouraged to purchase green housing if they are provided more reliable and concrete information.

Suggested Citation

  • Zhang, Li & Sun, Cong & Liu, Hongyu & Zheng, Siqi, 2016. "The role of public information in increasing homebuyers' willingness-to-pay for green housing: Evidence from Beijing," Ecological Economics, Elsevier, vol. 129(C), pages 40-49.
    • Handle: RePEc:eee:ecolec:v:129:y:2016:i:c:p:40-49
    DOI: 10.1016/j.ecolecon.2016.05.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800915303608
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2016.05.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lucas W. Davis & Gilbert E. Metcalf, 2016. "Does Better Information Lead to Better Choices? Evidence from Energy-Efficiency Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 589-625.
    2. Stefanie Lena Heinzle & Augustin Boey Ying Yip & Melissa Low Yu Xing, 2013. "The Influence of Green Building Certification Schemes on Real Estate Investor Behaviour: Evidence from Singapore," Urban Studies, Urban Studies Journal Limited, vol. 50(10), pages 1970-1987, August.
    3. Hunt Allcott & Dmitry Taubinsky, 2015. "Evaluating Behaviorally Motivated Policy: Experimental Evidence from the Lightbulb Market," American Economic Review, American Economic Association, vol. 105(8), pages 2501-2538, August.
    4. Fuerst, Franz & McAllister, Pat, 2011. "Eco-labeling in commercial office markets: Do LEED and Energy Star offices obtain multiple premiums?," Ecological Economics, Elsevier, vol. 70(6), pages 1220-1230, April.
    5. Deng, Yongheng & Li, Zhiliang & Quigley, John M., 2012. "Economic returns to energy-efficient investments in the housing market: Evidence from Singapore," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 506-515.
    6. MacMillan, Douglas & Hanley, Nick & Lienhoop, Nele, 2006. "Contingent valuation: Environmental polling or preference engine?," Ecological Economics, Elsevier, vol. 60(1), pages 299-307, November.
    7. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
    8. Andrea Chegut & Piet Eichholtz & Nils Kok, 2014. "Supply, Demand and the Value of Green Buildings," Urban Studies, Urban Studies Journal Limited, vol. 51(1), pages 22-43, January.
    9. Franz Fuerst & Constantine Kontokosta & Patrick McAllister, 2014. "Determinants of Green Building Adoption," Environment and Planning B, , vol. 41(3), pages 551-570, June.
    10. Brounen, Dirk & Kok, Nils & Quigley, John M., 2013. "Energy literacy, awareness, and conservation behavior of residential households," Energy Economics, Elsevier, vol. 38(C), pages 42-50.
    11. Piet Eichholtz & Nils Kok & John M. Quigley, 2010. "Doing Well by Doing Good? Green Office Buildings," American Economic Review, American Economic Association, vol. 100(5), pages 2492-2509, December.
    12. Hong Hu & Stan Geertman & Pieter Hooimeijer, 2014. "The willingness to pay for green apartments: The case of Nanjing, China," Urban Studies, Urban Studies Journal Limited, vol. 51(16), pages 3459-3478, December.
    13. Kahn, Matthew E. & Kok, Nils, 2014. "The capitalization of green labels in the California housing market," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 25-34.
    14. Dakshina G. De Silva & Rachel A. J. Pownall, 2014. "Going green: does it depend on education, gender or income?," Applied Economics, Taylor & Francis Journals, vol. 46(5), pages 573-586, February.
    15. Matthew E. Kahn, 2002. "Demographic change and the demand for environmental regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(1), pages 45-62.
    16. Kok, Nils & Jennen, Maarten, 2012. "The impact of energy labels and accessibility on office rents," Energy Policy, Elsevier, vol. 46(C), pages 489-497.
    17. Achtnicht, Martin, 2011. "Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany," Ecological Economics, Elsevier, vol. 70(11), pages 2191-2200, September.
    18. Zuo, Jian & Zhao, Zhen-Yu, 2014. "Green building research–current status and future agenda: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 271-281.
    19. Coad, Alex & de Haan, Peter & Woersdorfer, Julia Sophie, 2009. "Consumer support for environmental policies: An application to purchases of green cars," Ecological Economics, Elsevier, vol. 68(7), pages 2078-2086, May.
    20. Zheng, Siqi & Wu, Jing & Kahn, Matthew E. & Deng, Yongheng, 2012. "The nascent market for “green” real estate in Beijing," European Economic Review, Elsevier, vol. 56(5), pages 974-984.
    21. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(4), pages 659-679.
    22. Deng, Yongheng & Wu, Jing, 2014. "Economic returns to residential green building investment: The developers' perspective," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 35-44.
    23. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    24. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiang Du & Yunqing Yan & Youdan Huang & Chanchan Hao & Jiao Wu, 2021. "Evolutionary Games of Low-Carbon Behaviors of Construction Stakeholders under Carbon Taxes," IJERPH, MDPI, vol. 18(2), pages 1-20, January.
    2. Cicatiello, Lorenzo & Ercolano, Salvatore & Gaeta, Giuseppe Lucio & Pinto, Mauro, 2020. "Willingness to pay for environmental protection and the importance of pollutant industries in the regional economy. Evidence from Italy," Ecological Economics, Elsevier, vol. 177(C).
    3. Weimin Ma & Zitong Ren & Hua Ke, 2022. "Green Housing Subsidy Strategies Considering Consumers’ Green Preference," Sustainability, MDPI, vol. 14(5), pages 1-22, February.
    4. G. Vries & M. Rietkerk & R. Kooger, 2020. "The Hassle Factor as a Psychological Barrier to a Green Home," Journal of Consumer Policy, Springer, vol. 43(2), pages 345-352, June.
    5. Jia, Jun–Jun & Wu, Hua-Qing & Nie, Hong-Guang & Fan, Ying, 2019. "Modeling the willingness to pay for energy efficient residence in urban residential sector in China," Energy Policy, Elsevier, vol. 135(C).
    6. Yelly Kwesy Lawluvy & Albert Agbeko Ahiadu & Olivia Kwakyewaa Ntim, 2022. "Willingness To Pay For Green Buildings In Ghana: The Impact Of Benefit Sensitisation," AfRES 2022-032, African Real Estate Society (AfRES).
    7. Wei Ren & Yaxiao Wang, 2023. "Study on the Factors Affecting the Green Housing Purchase Intention in Urban Residents—Taking the Beijing-Tianjin-Hebei Region as an Example," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    8. Yu, Lu & Wu, Shuang & Jiang, Lu & Ding, Bowenpeng & Shi, Xiaonan, 2022. "Do more efficient buildings lead to lower household energy consumption for cooling? Evidence from Guangzhou, China," Energy Policy, Elsevier, vol. 168(C).
    9. Aleksandra Sus & Rafał Trzaska & Maciej Wilczyński & Joanna Hołub-Iwan, 2023. "Strategies of Energy Suppliers and Consumer Awareness in Green Energy Optics," Energies, MDPI, vol. 16(4), pages 1-23, February.
    10. Lin Zhang & Liwen Chen & Zezhou Wu & Hong Xue & Wenlin Dong, 2018. "Key Factors Affecting Informed Consumers’ Willingness to Pay for Green Housing: A Case Study of Jinan, China," Sustainability, MDPI, vol. 10(6), pages 1-16, May.
    11. Chakravarty, Sujoy & Mishra, Rajan, 2019. "Using social norms to reduce paper waste: Results from a field experiment in the Indian Information Technology sector," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    12. David T. Tan & Yi Gong & José Gabriel Siri, 2017. "The Impact of Subsidies on the Prevalence of Climate-Sensitive Residential Buildings in Malaysia," Sustainability, MDPI, vol. 9(12), pages 1-26, December.
    13. Tanaka, Takuro & Mizutani, Fumitoshi, 2023. "Determinants of the adoption of energy efficient water heaters in the residential sector: Evidence from a survey in Japan," Energy Policy, Elsevier, vol. 180(C).
    14. Shiwen Zhao & Liwen Chen, 2021. "Exploring Residents’ Purchase Intention of Green Housings in China: An Extended Perspective of Perceived Value," IJERPH, MDPI, vol. 18(8), pages 1-19, April.
    15. Cong Sun & Siqi Zheng & Jianghao Wang & Matthew E. Kahn, 2019. "Does clean air increase the demand for the consumer city? Evidence from Beijing," Journal of Regional Science, Wiley Blackwell, vol. 59(3), pages 409-434, June.
    16. Xiaoyun Zhang & Feng Dong, 2020. "Why Do Consumers Make Green Purchase Decisions? Insights from a Systematic Review," IJERPH, MDPI, vol. 17(18), pages 1-25, September.
    17. Hayoung Yoo & Heeyeun Yoon, 2021. "The Effect of Green Characteristics in Reducing the Inventory of Unsold Housing in New Residential Developments—A Case of Gyeonggi Province, in South Korea," Land, MDPI, vol. 10(4), pages 1-18, April.
    18. Gong, Cynthia M. & Lizieri, Colin & Bao, Helen X.H., 2019. "“Smarter information, smarter consumers”? Insights into the housing market," Journal of Business Research, Elsevier, vol. 97(C), pages 51-64.
    19. Shucai Bai & Fangyi Li & Wu Xie, 2022. "Green but Unpopular? Analysis on Purchase Intention of Heat Pump Water Heaters in China," Energies, MDPI, vol. 15(7), pages 1-19, March.
    20. Khan, Rana Asad Javid & Thaheem, Muhammad Jamaluddin & Ali, Tauha Hussain, 2020. "Are Pakistani homebuyers ready to adopt sustainable housing? An insight into their willingness to pay," Energy Policy, Elsevier, vol. 143(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ramos, A. & Gago, A. & Labandeira, X. & Linares, P., 2015. "The role of information for energy efficiency in the residential sector," Energy Economics, Elsevier, vol. 52(S1), pages 17-29.
    2. Li Zhang & Hongyu Liu & Jing Wu, 2017. "The price premium for green-labelled housing: Evidence from China," Urban Studies, Urban Studies Journal Limited, vol. 54(15), pages 3524-3541, November.
    3. Andrea Chegut & Piet Eichholtz & Rogier Holtermans & Juan Palacios, 2020. "Energy Efficiency Information and Valuation Practices in Rental Housing," The Journal of Real Estate Finance and Economics, Springer, vol. 60(1), pages 181-204, February.
    4. Copiello, Sergio, 2017. "Building energy efficiency: A research branch made of paradoxes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1064-1076.
    5. Zhang, Li & Wu, Jing & Liu, Hongyu, 2018. "Policies to enhance the drivers of green housing development in China," Energy Policy, Elsevier, vol. 121(C), pages 225-235.
    6. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    7. Fuerst, Franz & Gabrieli, Tommaso & McAllister, Patrick, 2017. "A green winner's curse? Investor behavior in the market for eco-certified office buildings," Economic Modelling, Elsevier, vol. 61(C), pages 137-146.
    8. Armin Jeddi Yeganeh & Andrew Patton McCoy & Steve Hankey, 2019. "Green Affordable Housing: Cost-Benefit Analysis for Zoning Incentives," Sustainability, MDPI, vol. 11(22), pages 1-24, November.
    9. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    10. Chegut, Andrea & Eichholtz, Piet & Holtermans, Rogier, 2016. "Energy efficiency and economic value in affordable housing," Energy Policy, Elsevier, vol. 97(C), pages 39-49.
    11. Fuerst, Franz & Shimizu, Chihiro, 2016. "Green luxury goods? The economics of eco-labels in the Japanese housing market," Journal of the Japanese and International Economies, Elsevier, vol. 39(C), pages 108-122.
    12. Fuerst, Franz & Warren-Myers, Georgia, 2018. "Does voluntary disclosure create a green lemon problem? Energy-efficiency ratings and house prices," Energy Economics, Elsevier, vol. 74(C), pages 1-12.
    13. Prashant Das & Jonathan A. Wiley, 2014. "Determinants of premia for energy-efficient design in the office market," Journal of Property Research, Taylor & Francis Journals, vol. 31(1), pages 64-86, March.
    14. Walls, Margaret & Gerarden, Todd & Palmer, Karen & Bak, Xian Fang, 2017. "Is energy efficiency capitalized into home prices? Evidence from three U.S. cities," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 104-124.
    15. Junichiro Onishi & Yongheng Deng & Chihiro Shimizu, 2021. "Green Premium in the Tokyo Office Rent Market," Sustainability, MDPI, vol. 13(21), pages 1-17, November.
    16. Florian Fizaine Fizaine & Pierre Voye & Catherine Baumont, 2018. "Les études hédoniques soutiennent-elles une valeur verte élevée dans le bâtiment ? Une réponse par la méta-analyse," Post-Print halshs-01957447, HAL.
    17. Liao, Wen-Chi & Zhao, Daxuan, 2019. "The selection and quantile treatment effects on the economic returns of green buildings," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 38-48.
    18. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    19. Ankamah-Yeboah, Isaac & Rehdanz, Katrin, 2014. "Explaining the variation in the value of building energy efficiency certificates: A quantitative meta-analysis," Kiel Working Papers 1949, Kiel Institute for the World Economy (IfW Kiel).
    20. He, Jia & Wu, Jing, 2016. "Doing well by doing good? The case of housing construction quality in China," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 46-53.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:129:y:2016:i:c:p:40-49. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.