Green Premium in the Tokyo Office Rent Market

Junichiro Onishi, Yongheng Deng and Chihiro Shimizu
Additional contact information
Junichiro Onishi: Xymax Real Estate Institute and Center for Spatial Information Science, The University of Tokyo, Chiba 277-8568, Japan
Chihiro Shimizu: Center for Spatial Information Science, The University of Tokyo, Chiba 277-8568, Japan

Sustainability, 2021, vol. 13, issue 21, 1-17

Abstract: More than 10 years have passed since studies on green buildings gained attention in the academic and industrial literature. Many studies report the economic value of green buildings, mainly in the U.S. and European markets. An empirical clarification of the dynamics of green premiums has significant implications for future urban sustainability. This study constructed a dataset of Tokyo office rents from 2009 to 2019. We estimated the green office rental premium using a hedonic approach. Our results show that, on average, an office property with a green label gains a premium of approximately 6.5% on contract rents. The Tokyo office market is heterogeneous, and endogeneity is an issue when identifying the green premium. We addressed the endogeneity issue with propensity score clustering. As a result of our estimation, the premium was approximately +5.4% for medium-sized old buildings and +2.6% for large-sized new buildings.

Keywords: green building; green label; hedonic approach; propensity score matching; clustering (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/21/12227/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/21/12227/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:21:p:12227-:d:672939

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().