Measuring Green Value in Housing Market: Evidence from Hangzhou

Abstract

With the rapid development of economy, homebuyers prefer to buy the residential complexes with green characteristics, such as living comfort and energy efficiency. As a new trend of housing development model, green housing which is consistent with the concept of sustainability has been promoted positively. More and more real estate developers have used marketing strategy and green words to advertise their residential products. Based on the Hangzhou newly-built housing transaction data in 2016, this study constructs the hedonic price model to quantitatively analyze whether such green marketing have an effect on housing prices. The empirical results show that green marketing really yields a price premium and allows developers to charge such premium that homebuyers have willingness to pay. This study can provide a theoretical basis for government to make relevant policies, as well as real estate developer to determine development decisions.