The Value of a Green Building Certificate for Office Buildings in CEE

Abstract

The Green Building movement has gained considerable strength in Central and Eastern Europe (CEE) in recent years. Green Building Councils have been created in almost all countries and various certification schemes have been introduced. Many developers who are active in the region have joined the Green Building councils. Also, they have started to take into consideration the corresponding certificates and standards. Despite of the strong interest in Green Building certificates in CEE, there is little evidence of the value such a certificate has in these markets. Contrary to the US, where enough transactions of certified buildings have accumulated so that hedonic studies could demonstrate the positive effect of Green Building certificates on rent levels and transaction prices (Eichholtz et al., 2010), the numbers of actual transactions are still too small in CEE for such an analysis. Therefore, the current study uses a contingent valuation approach and confronts respondents with hypothetical choices. The paper presents the conceptual framework and first empirical results for a contingent valuation study in two CEE countries: Poland and Austria. The framework of the study is the office market. Based on a series of background interviews in both countries we develop a web-based contingent valuation instrument that confronts decision makers in companies that are large office tenants with hypothetical options for office alternatives. One of the characteristics taken into consideration is the availability of a Green Building certificate. It is the ultimate goal of the analysis to extract from the choices of the respondents the financial value that they implicitly assign to a Green Building certificate. Eichholtz P.,N. Kok, and J.M. Quigley (2010). Doing Well By Doing Good? Green Office Buildings. American Economic Review 100(6), 2010: 2494-2511.