IDEAS home Printed from https://ideas.repec.org/a/spr/nathaz/v95y2019i1d10.1007_s11069-018-3435-4.html
   My bibliography  Save this article

Chinese urban resident willingness to pay for green housing based on double-entry mental accounting theory

Author

Listed:
  • Qianwen Li

    (China University of Mining and Technology)

  • Ruyin Long

    (China University of Mining and Technology)

  • Hong Chen

    (China University of Mining and Technology)

  • Feiyu Chen

    (China University of Mining and Technology)

  • Xiu Cheng

    (China University of Mining and Technology)

Abstract

Promotion and use of green housing is an important way to reduce building energy consumption, achieve emission reduction targets, and improve residential environments. In the process of consumer choice of green housing, residents’ psychological behaviors, product characteristics of green housing, and option framing methods all have an important influence on the willingness to pay (WTP). This paper analyzed WTP for green housing using two sets of experiments from the perspectives of consumer behavior theory and behavioral economics. Taking four cities with high levels of green housing development in China as examples to conduct large-scale empirical studies, we explored the impact of double-entry mental accounting on resident WTP for green housing. The results show that (1) each dimension of perceived benefits is significantly positively correlated with WTP, each dimension of perceived sacrifices is significantly negatively correlated with WTP, and the sensitivity coefficient of functional risk and policy risk is relatively large, i.e., WTP is more sensitive to functional risk and policy risk. (2) Double-entry mental accounting has a significant moderating effect between residents perceived value and WTP. The stronger the positive correlation between perceived benefits and the WTP when the larger pain of payment (large coefficient of pleasure attenuation or small coefficient of pain buffering) rather than smaller pain of payment meaning greater impact of perceived benefits on WTP. Negative correlation between perceived sacrifices and WTP is weak when residents have small coefficient of pleasure attenuation, indicating that the residents have higher psychological enjoyment when making consumption decisions. Hence, WTP is still high even in situations with higher perceived sacrifice. However, the coefficient of pain buffering has no significant moderating effect on the relationship between perceived sacrifices and WTP. (3) In the context of different framing effects, resident values mediate between perceived benefits and WTP, and the framing effect can influence resident WTP. Resident WTP for green housing is higher in the context of subtractive framing compared with additive framing. Various proposals are provided at government and developer level based on the study outcomes.

Suggested Citation

  • Qianwen Li & Ruyin Long & Hong Chen & Feiyu Chen & Xiu Cheng, 2019. "Chinese urban resident willingness to pay for green housing based on double-entry mental accounting theory," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 129-153, January.
    • Handle: RePEc:spr:nathaz:v:95:y:2019:i:1:d:10.1007_s11069-018-3435-4
    DOI: 10.1007/s11069-018-3435-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11069-018-3435-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11069-018-3435-4?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. Thaler, Richard H, 1990. "Saving, Fungibility, and Mental Accounts," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 193-205, Winter.
    2. Jin, Liyin & He, Yanqun & Song, Haiyan, 2012. "Service customization: To upgrade or to downgrade? An investigation of how option framing affects tourists’ choice of package-tour services," Tourism Management, Elsevier, vol. 33(2), pages 266-275.
    3. Manoj Thomas & Kalpesh Kaushik Desai & Satheeshkumar Seenivasan, 2011. "How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 38(1), pages 126-139.
    4. Minda Ma & Ran Yan & Weiguang Cai, 2017. "A STIRPAT model-based methodology for calculating energy savings in China’s existing civil buildings from 2001 to 2015," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(3), pages 1765-1781, July.
    5. repec:arz:wpaper:eres2013-141 is not listed on IDEAS
    6. Kivetz, Ran & Simonson, Itamar, 2002. "Self-Control for the Righteous: Toward a Theory of Precommitment to Indulgence," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(2), pages 199-217, September.
    7. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    8. Li, Jun, 2016. "Energy performance heterogeneity in China׳s buildings sector: A data-driven investigation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1587-1600.
    9. Ke Wang & Shiwei Yu & Mo-Jie Li & Yi-Ming Wei, 2015. "Multi-directional efficiency analysis-based regional industrial environmental performance evaluation of China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 75(2), pages 273-299, February.
    10. Iddisah Sulemana, 2016. "Are Happier People More Willing to Make Income Sacrifices to Protect the Environment?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(1), pages 447-467, May.
    11. Chuanwang Sun & Nan Lyu & Xiaoling Ouyang, 2014. "Chinese Public Willingness to Pay to Avoid Having Nuclear Power Plants in the Neighborhood," Sustainability, MDPI, vol. 6(10), pages 1-27, October.
    12. Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, vol. 17(1), pages 4-28.
    13. Anja Buerke & Tammo Straatmann & Nick Lin-Hi & Karsten Müller, 2017. "Consumer awareness and sustainability-focused value orientation as motivating factors of responsible consumer behavior," Review of Managerial Science, Springer, vol. 11(4), pages 959-991, October.
    14. Scott I. Rick & Cynthia E. Cryder & George Loewenstein, 2008. "Tightwads and Spendthrifts," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 34(6), pages 767-782, October.
    15. Xinshu Zhao & John G. Lynch & Qimei Chen, 2010. "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(2), pages 197-206, August.
    16. Kitima Kritiyachotipakorn & Supeecha Panichpathom & Jittaporn Sriboonjit & Niti Rattanaprichavej, 2013. "How Customer Perceived Value and Perceived Risk Influence? The Purchase Intention and Willingness to Pay for 30-Years Leasehold Luxury Residences in Bangkok," ERES eres2013_141, European Real Estate Society (ERES).
    17. Li, Guoxin & Li, Guofeng & Kambele, Zephaniah, 2012. "Luxury fashion brand consumers in China: Perceived value, fashion lifestyle, and willingness to pay," Journal of Business Research, Elsevier, vol. 65(10), pages 1516-1522.
    18. Strahilevitz, Michal A & Loewenstein, George, 1998. "The Effect of Ownership History on the Valuation of Objects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 25(3), pages 276-289, December.
    19. Judith I. M. de Groot & Linda Steg & Wouter Poortinga, 2013. "Values, Perceived Risks and Benefits, and Acceptability of Nuclear Energy," Risk Analysis, John Wiley & Sons, vol. 33(2), pages 307-317, February.
    20. Sedlacek, Sabine & Maier, Gunther, 2012. "Can green building councils serve as third party governance institutions? An economic and institutional analysis," Energy Policy, Elsevier, vol. 49(C), pages 479-487.
    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. 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).
    2. Mohamed Abdel-Basset & Abduallah Gamal & Ripon K. Chakrabortty & Michael Ryan & Nissreen El-Saber, 2021. "A Comprehensive Framework for Evaluating Sustainable Green Building Indicators under an Uncertain Environment," Sustainability, MDPI, vol. 13(11), pages 1-25, June.
    3. 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.
    4. Wen, Tong & Leung, Xi Y. & Li, Bin & Hu, Lingyan, 2021. "Examining framing effect in travel package purchase: An application of double-entry mental accounting theory," Annals of Tourism Research, Elsevier, vol. 90(C).
    5. Ropret Homar, Aja & Knežević Cvelbar, Ljubica, 2021. "The effects of framing on environmental decisions: A systematic literature review," Ecological Economics, Elsevier, vol. 183(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. Yizhao Jiang, 2022. "The Influence of Payment Method: Do Consumers Pay More with Mobile Payment?," Papers 2210.14631, arXiv.org.
    2. Wen, Tong & Leung, Xi Y. & Li, Bin & Hu, Lingyan, 2021. "Examining framing effect in travel package purchase: An application of double-entry mental accounting theory," Annals of Tourism Research, Elsevier, vol. 90(C).
    3. Shi, Haijiao & Chen, Rong & Xu, Xiaobing, 2021. "How reward uncertainty influences subsequent donations: The role of mental accounting," Journal of Business Research, Elsevier, vol. 132(C), pages 383-391.
    4. Bhatt, Siddharth & Pai, Dinesh R. & DelVecchio, Devon, 2023. "The dark side of multiunit discounts: Multiunit discounts reduce rest of basket revenue," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    5. Thunström, Linda & Gilbert, Ben & Ritten, Chian Jones, 2018. "Nudges that hurt those already hurting – distributional and unintended effects of salience nudges," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 267-282.
    6. Liang Huang & Rafay A. Siddiqui & Anastasiya Pocheptsova Ghosh, 2024. "More of the same: Painful payment methods decrease variety seeking," Marketing Letters, Springer, vol. 35(4), pages 533-545, December.
    7. Broekhoff, Marie-Claire & van der Cruijsen, Carin, 2024. "Paying in a blink of an eye: it hurts less, but you spend more," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 110-133.
    8. Ma, Qingguo & He, Yijin & Tan, Yulin & Cheng, Lu & Wang, Manlin, 2024. "Unveiling the Impact of Payment Methods on Consumer Behavior: Insights and Future Directions," OSF Preprints 3fphk, Center for Open Science.
    9. David Boto-García & Alvaro Muñiz-Fernández & Levi Pérez, 2024. "Windfall money and outbound tourism: A natural experiment from lottery winnings," Tourism Economics, , vol. 30(5), pages 1257-1280, August.
    10. Francesco Cerigioni & Simone Galperti, 2021. "Listing specs: The effect of framing attributes on choice," Economics Working Papers 1775, Department of Economics and Business, Universitat Pompeu Fabra.
    11. Haipeng (Allan) Chen & Akshay R. Rao, 2002. "Close Encounters of Two Kinds: False Alarms and Dashed Hopes," Marketing Science, INFORMS, vol. 21(2), pages 178-196, August.
    12. Dayana Zhappassova & Ben Gilbert & Linda Thunstrom, 2018. "Energy efficiency, green technology and the pain of paying," Working Papers 2018-03, Colorado School of Mines, Division of Economics and Business.
    13. Falk, Tomas & Kunz, Werner H. & Schepers, Jeroen J.L. & Mrozek, Alexander J., 2016. "How mobile payment influences the overall store price image," Journal of Business Research, Elsevier, vol. 69(7), pages 2417-2423.
    14. Antonides, Gerrit & Manon de Groot, I. & Fred van Raaij, W., 2011. "Mental budgeting and the management of household finance," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 546-555, August.
    15. Elena DRUICA & Rodica IANOLE & Viorel CORNESCU, 2014. "The psychological cost of saving – an agent-based modelling approach," Romanian Journal of Economics, Institute of National Economy, vol. 39(2(48)), pages 34-48, December.
    16. Manoj Thomas, 2013. "Commentary on behavioral price research: the role of subjective experiences in price cognition," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 141-145, September.
    17. Edika G. Quispe-Torreblanca & Neil Stewart & John Gathergood & George Loewenstein, 2019. "The Red, the Black, and the Plastic: Paying Down Credit Card Debt for Hotels, Not Sofas," Management Science, INFORMS, vol. 65(11), pages 5392-5410, November.
    18. Stacie F. Waites & Adam Farmer & Carol L. Esmark Jones, 2021. "Building toward a solid foundation: The effect of thinking concretely about the future," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(1), pages 254-273, March.
    19. Sarofim, Samer & Chatterjee, Promothesh & Rose, Randall, 2020. "When store credit cards hurt retailers: The differential effect of paying credit card dues on consumers' purchasing behavior," Journal of Business Research, Elsevier, vol. 107(C), pages 290-301.
    20. Charan K. Bagga & Neil Bendle & June Cotte, 2019. "Object valuation and non-ownership possession: how renting and borrowing impact willingness-to-pay," Journal of the Academy of Marketing Science, Springer, vol. 47(1), pages 97-117, January.

    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:spr:nathaz:v:95:y:2019:i:1:d:10.1007_s11069-018-3435-4. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.