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The political economy of green office buildings

The political economy of green office buildings 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Property Investment & Finance Emerald Publishing

The political economy of green office buildings

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1463-578X
DOI
10.1108/14635781111150394
Publisher site
See Article on Publisher Site

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.

Journal

Journal of Property Investment & Finance – Emerald Publishing

Published: Jul 12, 2011

Keywords: Green real estate; Political ideology; Office buildings; Rental value

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