Eco‐labels and willingness‐to‐pay: a Hong Kong study

Abstract

PurposeThe purpose of this paper is to investigate whether consumers in Hong Kong's private housing market are willing to pay more for new apartment units with an eco‐label.Design/methodology/approachGreen or sustainable housing has recently become a new orthodoxy in the field of architecture. Governments commonly use legislation or subsidies to promote green housing. However, eco‐friendly housing provision can become autonomous without any state intervention if the consumers are willing to pay more for housing of better environmental performance. In this light, this study explores Hong Kong resident's willingness‐to‐pay (WTP) for eco‐labelled housing based on the findings of a face‐to‐face questionnaire survey. Besides, the determinants of the WTP are identified using logistic regression modelling.FindingsLess than half of the 231 respondents were willing to pay more for a new eco‐labelled apartment unit. The number of “willing” respondents dropped significantly with the label grade which signified the level of environmental performance of a property. Moreover, the decision about WTP was contingent mainly on the respondents’ household income and environmental attitude.Research limitations/implicationsThe findings of this study can offer valuable insights for the house‐building industry and policy makers into how to promote a more sustainable built environment in Hong Kong.Originality/valueNearly all previous research on green building consumerism focussed on commercial buildings and houses. As a preliminary study, this research extends the body of knowledge by exploring the WTP for eco‐labelled apartments.

The Impact of Subsidies on the Prevalence of Climate-Sensitive Residential Buildings in Malaysia

“…This in turn requires homebuyers with "Willingness to Pay for CSB" that matches existing cost premiums. WTP for green buildings is influenced by several factors including income [53] and exposure to green buildings ("Awareness of CSB Benefits") [54]; the latter forms a potentially important feedback loop. Unfortunately, there is a lack of Malaysian data on WTP and motivating factors for residential green buildings.…”

“…Among those willing to pay a cost premium, mean WTP was 0.6% with a standard deviation of 1.3% [53]. [48,53]. Curve construction is described in Appendix A.…”

“…The second study used was conducted in the Tai Kok Tsui district in Hong Kong [53], chosen for its closer socio-economic match to the Malaysian context and the low WTP observed, providing a conservative estimate of consumer demand. In this study, 88% of respondents were unwilling to pay any premium at all for bronze Building Environmental Assessment Method (BEAM) certified housing.…”

“…In this study, 88% of respondents were unwilling to pay any premium at all for bronze Building Environmental Assessment Method (BEAM) certified housing. Among those willing to pay a cost premium, mean WTP was 0.6% with a standard deviation of 1.3% [53]. [48,53].…”

“…. Modelled willingness to pay curves and survey data for homebuyers of climate-sensitive buildings [48,53]. Curve construction is described in Appendix A.…”