Determinants of Green Building Adoption
30 Pages Posted: 16 Apr 2011 Last revised: 4 Dec 2013
Date Written: April 6, 2011
This paper investigates variations in the adoption of LEED-certified commercial buildings across 174 CBSA in the United States. Drawing upon a unique database and using a robust analytical framework, the determinants of the proportion LEED-certified space are modeled. We find that, despite high growth rates, LEED-certified stock accounts for a relatively small proportion of total commercial stock. The average proportion is less than 1%. A further contribution of the paper is that our concentration measure avoids the biases associated with simple percentage measures that were used in previous studies of this topic. Strongest predictors of the proportion of LEED-certified commercial space in a local market are market size, educational attainment and economic growth. In terms of policy effectiveness, it is found that only a mandatory requirement to obtain LEED-certification for new buildings has a significant positive effect on market penetration.
Keywords: energy efficiency, LEED, real estate, innovation diffusion, eco-labeling
JEL Classification: D12, Q51, R33
Suggested Citation: Suggested Citation