A green winner's curse? Investor behavior in the market for eco-certified office buildings

Fuerst, F., Gabrieli, T. and McAllister, P. (2017) A green winner's curse? Investor behavior in the market for eco-certified office buildings. Economic Modelling, 61. pp. 137-146. ISSN 0264-9993 doi: 10.1016/j.econmod.2016.11.007

Abstract/Summary

This paper contributes to the growing literature on the economics of green buildings: by merging auction theory and hedonic regression analysis we investigate the relationship between market concentration and price premiums in the American market for eco-certified real estate assets. Auction theory is used to model price formation where eco-investors may differ in their valuation of assets. Controlling for a large number of features, the empirical results provide evidence of a significant and positive relationship between investors’ eco-certified market share and prices of eco-certified space. Contributing to the recent debate over the nature of the green premium, we find that eco-investors are creating clientele effects and that they may be subject to a green winner’s curse.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/69598
Identification Number/DOI	10.1016/j.econmod.2016.11.007
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Elsevier
Download/View statistics	View download statistics for this item