Identifying Market Segment for the Assessment of a Price Premium for Green Certified Housing: A Cluster Analysis Approach

Abstract

While the literature confirms the existence of a green premium, various researchers have acknowledged the importance of homogeneity in the dataset used for premium assessment. This study developed a systematic approach to extract a sales subsample containing transactions from green-certified apartments and their most similar counterparts based on cluster analysis. The study applied k-means and PAM clustering algorithms to split an extensive sales sample of 81,605 transactions into sales subsamples. A sales subsample containing transactions from green-certified apartments and their peers was extracted and used for green premium estimation. The results indicate that through cluster analysis, a market segment containing above 80% of the total housing transactions from green-certified apartments could be identified. Through the hedonic model, a green premium of 26.2% was identified from the entire sales sample (no market segmentation). However, this value was reduced to 12.2 and 17.8% when estimated from a sales subsample extracted through k-means and PAM clustering, respectively. These findings have implications for the close assessment of green certification impact on the sale prices. In addition, they can also serve as an indicator of housing categories that need extra effort to promote green practices in that particular market segment.

Do Sustainable Consumers Have Sustainable Behaviors? An Empirical Study to Understand the Purchase of Food Products

“…The hypothesis of this research was to analyze consumer behavior by trying to identify environmental and sustainability issues that may influence their awareness towards sustainable behavior when purchasing a food product [18,19] The aim of this research was to analyze whether consumers who declare themselves environmentally aware adopt sustainable behavior. Based on the 4 clusters identified in this study, only one (Cluster 1-"sustainable consumer") comprises individuals who declare themselves attentive to environmental issues and accompany this awareness with natural, sustainable behavior.…”

“…In the current economic and social context, it seems highly relevant and urgent to consider the gap between consumers' attitudes toward sustainable consumption and their purchasing behavior toward sustainable products. This paper provides an understanding of who the consumers who claim to be sustainable are and who adopts sustainable behavior when purchasing a food product [18,19]. The study conducted provides insight into the gender of sustainable consumers, their age, educational qualification, profession, and the communication channels used to acquire information on sustainable food products with eco-labels.…”