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The political economy of green office buildings

David Harrison (Texas Tech University, Lubbock, Texas, USA)
Michael Seiler (Old Dominion University, Norfolk, Virginia, USA)

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 12 July 2011

Abstract

Purpose

This paper aims to examine whether rental premiums accrue to environmentally certified class “A” office buildings and, further, to what extent such premiums vary with the political ideology of the local market area.

Design/methodology/approach

Using standard ordinary least squares (OLS) regression techniques, the paper models rental rates on environmentally certified structures as a function of the space market characteristics, economic environment, and political ideology within each local market area.

Findings

The paper finds significant variation in environmentally certified rental premiums across jurisdiction‐specific political ideology metrics. Specifically, politically liberal locations exhibit green rental premiums of nearly 6 percent, while politically conservative locations exhibit premiums of less than 2 percent.

Originality/value

This paper expands the existing literature by offering further evidence of positive rental premiums accruing to environmental certification, and by systematically exploring the fundamental determinants of these observed value differences.

Keywords

Citation

Harrison, D. and Seiler, M. (2011), "The political economy of green office buildings", Journal of Property Investment & Finance, Vol. 29 No. 4/5, pp. 551-565. https://doi.org/10.1108/14635781111150394

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited