{"title":"The Economic and Cultural Motives of Green Price Premium","authors":"Zinat Alam, Miran Hossain, Lingling Wang","doi":"10.1016/j.bar.2025.101698","DOIUrl":null,"url":null,"abstract":"We use the house transaction data to analyze why houses with energy-saving (green) features are sold for higher prices. We estimate <ce:italic>house-specific</ce:italic> economic values of green features and show that these values account for about 20-53% of the green price premium, depending on how economic values are measured. Individual homebuyers’ cultural origins and environmental attitudes also play a significant role in explaining the green price premium, with a weaker premium observed among less individualistic and indulgent buyers, and a stronger premium among those who are more uncertainty-avoidant and pro-environment. These results are robust to various strategies to address selection bias and cannot be explained by buyers’ income levels or political orientations. Our findings point to both the economic and social value of green homes and highlight the role of investors’ behavioral preferences in evaluating green investments.","PeriodicalId":501001,"journal":{"name":"The British Accounting Review","volume":"40 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2025-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"The British Accounting Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1016/j.bar.2025.101698","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
We use the house transaction data to analyze why houses with energy-saving (green) features are sold for higher prices. We estimate house-specific economic values of green features and show that these values account for about 20-53% of the green price premium, depending on how economic values are measured. Individual homebuyers’ cultural origins and environmental attitudes also play a significant role in explaining the green price premium, with a weaker premium observed among less individualistic and indulgent buyers, and a stronger premium among those who are more uncertainty-avoidant and pro-environment. These results are robust to various strategies to address selection bias and cannot be explained by buyers’ income levels or political orientations. Our findings point to both the economic and social value of green homes and highlight the role of investors’ behavioral preferences in evaluating green investments.
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