Greening offices: Willingness to pay for green-certified office spaces in Bengaluru, India

Pleasa Abraham and Haripriya Gundimeda ()
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Haripriya Gundimeda: IIT Bombay

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2020, vol. 22, issue 3, No 7, 1839-1857

Abstract: Abstract The rapidly growing construction sector in India has a large resource foot print but can offer a vast potential to mitigate and adapt to climate change. Greening the building sector is feasible through various policy measures and incentives to deal with recycling and waste treatment, reduction in energy use, emissions and the use of other hazardous substances, which have several public and private benefits. The objective of this study is to understand whether or not and by how much would the consumers be willing to pay for green buildings if the information asymmetry is reduced by information provisions of benefits from green buildings. This paper uses a choice experiment to evaluate the firms’ willingness to pay for green-certified office spaces in the Indian city of Bengaluru. The study relied on primary survey data drawn from around 115 firms working in rented office spaces in Bengaluru, who were asked to choose between status quo and different levels of green certification. The Tobit model was used for estimation, and the results show that firms value private benefits like reduction in electricity and water bills, water and waste recycling significantly. The willingness to pay of firms is negatively related to rent of the office space and positively related to annual turnover of the firm and prior knowledge on the green building certification.

Keywords: Green buildings; Willingness to pay; Discrete choice experiment; Tobit; Green building certification (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10668-018-0265-1

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