Abstract
China has witnessed a rapid growth of green building in the past few years. Green building development in residential sector is relatively slow. This paper provides nuanced evidence for explaining the slow growth of green residential building (GRB) based on a case study of the market in Shenzhen. This paper uses hedonic pricing models with a unique transaction dataset to find out an average price discount of 11.94% for GRB in second-hand housing market. Such price discount of GRB grows as housing price rises, insinuating that expensive housing obtains greater economic loss from green label. Our findings drawn from employing heterogeneity analysis show that the GRBs being sold in spring and winter tend to have a smaller price discount than those sold in summer and autumn. The GRBs with more rooms and parlors, however, tend to have a greater price discount in second-hand housing market. Our findings confirm that both building age and distance to central business district (CBD) offset the value loss resulting from green label. This study conveys a negative message to the economic return of GRB in China’s second-hand housing market. Our findings advocate strong policy incentives to promote demand for GRB and reduce pertinent market barriers.
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