A green winner's curse? Investor behavior in the market for eco-certified office buildings
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Fuerst, F., Gabrieli, T., & McAllister, P. (2017). A green winner's curse? Investor behavior in the market for eco-certified office buildings. Economic Modelling, 61 137-146. https://doi.org/10.1016/j.econmod.2016.11.007
© 2016 Elsevier Ltd This paper contributes to the growing literature on the economics of green buildings: by merging auction theory and hedonic regression analysis we investigate the relationship between market concentration and price premiums in the American market for eco-certified real estate assets. Auction theory is used to model price formation where eco-investors may differ in their valuation of assets. Controlling for a large number of features, the empirical results provide evidence of a significant and positive relationship between investors’ eco-certified market share and prices of eco-certified space. Contributing to the recent debate over the nature of the green premium, we find that eco-investors are creating clientele effects and that they may be subject to a green winner's curse.
External DOI: https://doi.org/10.1016/j.econmod.2016.11.007
This record's URL: https://www.repository.cam.ac.uk/handle/1810/283345