Eco‐labels and willingness‐to‐pay: a Hong Kong study

Abstract

Purpose

The purpose of this paper is to investigate whether consumers in Hong Kong's private housing market are willing to pay more for new apartment units with an eco‐label.

Design/methodology/approach

Green or sustainable housing has recently become a new orthodoxy in the field of architecture. Governments commonly use legislation or subsidies to promote green housing. However, eco‐friendly housing provision can become autonomous without any state intervention if the consumers are willing to pay more for housing of better environmental performance. In this light, this study explores Hong Kong resident's willingness‐to‐pay (WTP) for eco‐labelled housing based on the findings of a face‐to‐face questionnaire survey. Besides, the determinants of the WTP are identified using logistic regression modelling.

Findings

Less than half of the 231 respondents were willing to pay more for a new eco‐labelled apartment unit. The number of “willing” respondents dropped significantly with the label grade which signified the level of environmental performance of a property. Moreover, the decision about WTP was contingent mainly on the respondents’ household income and environmental attitude.

Research limitations/implications

The findings of this study can offer valuable insights for the house‐building industry and policy makers into how to promote a more sustainable built environment in Hong Kong.

Originality/value

Nearly all previous research on green building consumerism focussed on commercial buildings and houses. As a preliminary study, this research extends the body of knowledge by exploring the WTP for eco‐labelled apartments.

Citation

Yau, Y. (2012), "Eco‐labels and willingness‐to‐pay: a Hong Kong study", Smart and Sustainable Built Environment, Vol. 1 No. 3, pp. 277-290. https://doi.org/10.1108/20466091211287146