This paper provides the first credible evidence on the economic value of “green buildings” derived from impersonal market transactions rather than engineering estimates. We analyze clusters of ...certified green and nearby buildings, establishing that “rated” buildings command substantially higher rents and selling prices than otherwise identical buildings. Variations in premiums are systematically related to energy-saving characteristics. Increased energy efficiency is associated with increased selling prices -- beyond the premiums paid for a labeled building. Evidence suggests that the intangible effects of the label itself may also play a role in determining the values of green buildings in the marketplace. (JEL G31,M14,Q52,R33)
Attention to 'sustainability' and energy efficiency rating schemes in the commercial property sector has increased rapidly during the past decade. In the UK, commercial properties have been certified ...under the BREEAM rating scheme since 1999, offering fertile ground to investigate the economic dynamics of 'green' certification in the commercial property market. This paper documents that, over the 2000–09 period, the expanding supply of green buildings within a given London neighbourhood had a positive impact on average rents and prices, but reduced rents and prices for environmentally certified real estate. The results suggest that there is a gentrification effect from green buildings. However, each additional "green" building decreases the marginal effect of certification in the rental and transaction markets by 2 per cent and 5 per cent respectively. In addition, controlling for lease contract features, like contract length and the rent-free period, modifies the impact of environmental certification on rental prices.
Health is a critical factor for the generation of value by workers. Companies bear substantial costs associated with absenteeism and presenteeism among their employees. This study investigates the ...impact of the environmental conditions in the workplace on the health and job satisfaction of employees, as core factors of productivity. We provide evidence based on a natural experiment, in which 70% of the workforce of a municipality in the Netherlands was relocated to a building with a design focused on sustainability and health and well-being. We construct a longitudinal dataset based on individual surveys of the entire municipality workforce and include measures before and after the move. The estimation results show a significant improvement in the perceived environmental conditions, as well as in the health and well-being of the relocated workers, measured by the drop in incidence of sick building syndrome symptoms. Results are heterogeneous based on age: older groups of employees enjoy larger health impacts. The relocation effects remain persistent in the medium term (two years after the moving date). Importantly, a mediation analysis suggests that the achieved improvements in health and well-being lead to significantly enhanced job satisfaction and a 2% reduction in the prevalence of sick leave.
Abstract
Indoor climate interventions are often motivated from a worker comfort and productivity perspective. However, the relationship between indoor climate and human performance remains unclear. ...We assess the effect of indoor climate factors on human performance, focusing on the impact of indoor temperature on decision processes. Specifically, we expect heat to negatively influence higher cognitive rational processes, forcing people to rely more on intuitive shortcuts. In a laboratory setting, participants (N=257) were exposed to a controlled physical environment with either a hot temperature (28° C) or a neutral temperature (22° C) over a two-hour period, in which a battery of validated tests were conducted. We find that heat exposure did not lead to a difference in decision quality. We did find evidence for a strong gender difference in self-report, such that only men expect that high temperature leads to a significant decline in performance, which does in fact not materialize. These results cast doubt on the validity of self-report as a proxy for performance under different indoor climate conditions.
Firms’ real estate choices significantly affect their sustainability, due to real estate’s impact on the natural environment. This paper investigates the ecological responsiveness of firms in ...specific industries by analyzing the decisions these firms make in occupying office space. We analyze the decisions of more than 11,000 tenants to choose office space in green buildings or in, otherwise comparable, conventional buildings nearby. Controlling for building quality and location, we find that corporations in the oil and banking industries, as well as non-profit organizations, are among the most prominent green tenants. Furthermore, measures of an industry’s human capital intensity are positively related to the propensity to lease green office space. These empirical findings confirm the theoretical framework on economic advantage and institutional pressure as important determinants for the ecological responsiveness of firms.
•This paper links housing demand and demographics at the household level.•Existing methodology is refined by distinguishing between life cycle and cohort attributes.•Housing demand is mainly driven ...by human capital and does not decline with age.•Study based on English data; results hold for industrialized countries in general.
This paper investigates how the demand for residential real estate depends on age and other demographic characteristics at the household level. Based on a detailed cross-sectional survey of English households, it finds that housing demand is significantly determined by a household’s human capital, and that housing demand generally increases with age. After retirement it declines, but only to a small extent. High education levels, good health, and high income will increase a household’s demand for housing even when households age. These results are relevant for countries that experience population shrinkage, but where total housing demand could still grow in the future despite stagnating household numbers and aging populations. The paper further shows that changes in demographics lead to very heterogeneous demand responses for different housing attributes, providing information regarding the future qualitative demand for housing.
Introduction:
Following a period of strict lockdowns during the COVID-19 pandemic, most countries introduced policies in which citizens were expected to avoid crowded places using common sense, as ...advised by the WHO. We argue that the ambiguity in the recommendation to “avoid crowded places” implicitly forces individuals to make a complex strategic decision.
Methods:
Using a Dutch representative sample of 1,048 participants 42% male, mean age=43.78years (SD=12.53), we examine the effect of context on the decision to visit a hypothetical recreational hotspot under the policy recommendation to “avoid crowded places.” We randomize four levels of context on the crowdedness “on the streets” (no context, low, medium, and high context). Subsequently, participants are asked to estimate the percentage of others going out in the same situation. Finally, we assess the impact of a selection of personal characteristics on the likelihood of visiting a crowded place.
Results:
Respondents are proportionally more likely to go in a low context and high context, compared to no context (diff=0.121,
p
<0.000, and diff=0.034,
p
<0.05, respectively) and middle context (diff=0.125,
p
<0.000, and diff=0.037,
p
<0.05, respectively). Low context information also decreases the expectation of others going out (−2.63%,
z
=4.68,
p
<0.000). High context information increases the expected percentage of others going out (significant only for medium to high context; 2.94%,
z
=7.34,
p
<0.001). Furthermore, we show that education, age, and health and risk attitude are all predictive of the likelihood to visit a crowded place, notwithstanding the context.
Discussion:
Although there is a strong inclination to avoid crowded places during the COVID-19 pandemic (81%), we find two context-driven exceptions: when people expect to avoid crowded spots (in the “low” context, i.e., strategical decision-making) and when people expect others to go (social influence). The freedom provided by ambiguous public policy is implicitly asking more from the population than it initially seems. “Use your common sense” is often the accompanied advice, but our results show that more and better information concerning the context is essential to enable us to make an optimal decision for ourselves, and for society.
The consensus in the academic literature is that energy efficiency is associated with transaction value premiums, but it is not clear to what extent property appraisers take account of this. We ...decompose external appraisals of rental housing by international valuation firms in England and the Netherlands in two waves, keeping the samples of valued homes constant between these years. We find a notable change in the behavior of external property appraisers. In England, energy performance does not impact assessed values in 2012, while estimation results for 2015 show a significant discount in assessed values for D-, E- and F- relative to C-labeled dwellings. For the Netherlands, we do not observe a significant relationship between energy efficiency and assessed values in 2010, but in 2015 we find that more energy efficiency leads to higher external valuations.
Spatial Dependence in International Office Markets Chegut, Andrea M.; Eichholtz, Piet M. A.; Rodrigues, Paulo J. M.
Journal of real estate finance and economics/The Journal of real estate finance and economics,
08/2015, Letnik:
51, Številka:
2
Journal Article
Recenzirano
Odprti dostop
This paper investigates spatial dependence in the prices of office buildings in Hong Kong, London, Los Angeles, New York City, Paris, and Tokyo for 2007 to 2013. Compared to prior literature, we find ...low economic impact from spatial dependence in all six markets, and spatial and spatial-temporal dependence do not moderate the effects of hedonic characteristics statistically or economically. However, investor and seller types as well as neighborhood location have a significant impact on the economic and statistical significance of the spatial and spatial-temporal parameters. Spatial office price indices for London, Paris and Tokyo decline somewhat more than do hedonic indices during the crisis.
This paper investigates the importance of market institutions for the performance of international property investors during the 1996–2007 period. The results show that international property ...companies underperform local property companies in the early years of the sample period. This underperformance is driven by the political environment, the level of economic integration, and the transparency of the real estate market in target countries. The underperformance of internationals disappears in the later years of the sample period, and so does the significance of the aforementioned factors in explaining performance differences among international companies. These findings suggest that the increased transparency of the global real estate industry has leveled the playing field for foreign property investors.
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