Green Certifications in Residential Real Estate: Discounted Cost Savings or Name Recognition?

摘要

A variety of green certifications is now available for residential housing in the United States. However, they have not been thoroughly investigated yet. The few existing studies have found positive valuation impacts for green-certified homes, mainly using the ENERGY STAR certification, relative to homes with no green certification. In this study, we utilize a sample comprised only of green-certified homes to test for differences in transaction outcomes across different types of green certifications. The results indicate that ENERGY STAR certified homes experience a significant price increase relative to other types of green certification, while EarthCraft certified homes do not. Given that the expected energy savings for EarthCraft certification and ENERGY STAR certification are almost identical, but EarthCraft requires additional green building standards to be met, these results are interpreted as evidence that home buyers are assigning value simply to the more recognizable program name rather than the potential cost savings (or other benefits) from program participation.