The political economy of green office buildings
Journal of Property Investment & Finance
Article publication date: 12 July 2011
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.
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.
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.
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.
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
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