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The selection and quantile treatment effects on the economic returns of green buildings

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  • Liao, Wen-Chi
  • Zhao, Daxuan
Abstract
This paper adds a fresh perspective on the economic returns of green buildings using Singapore housing data. It estimates both the conditional and unconditional quantile treatment effects, by applying a recent econometric theory that explicitly recognizes and addresses the fundamental difference between the two types of quantile effects. The theory exploits selection on observables, which is widely accepted and commonly handled through one of two propensity score methods in the green building literature. The research finds that inverse probability weighting outperforms the other and adopts it to estimate the quantile effects, after evaluations including a comparison between the conditional and unconditional mean effects. Green buildings' premium is significant but varies notably across housing price quantiles. The treatment effect estimates for the conditional price distribution exhibit a hump shape, but the estimates for the marginal distribution display an upward trend. The conditional and unconditional quantile treatment effects both provide useful information for research, policy, and practice. The results indicate that the incentive for going green and the need for government intervention are both non-uniform.

Suggested Citation

  • Liao, Wen-Chi & Zhao, Daxuan, 2019. "The selection and quantile treatment effects on the economic returns of green buildings," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 38-48.
    • Handle: RePEc:eee:regeco:v:74:y:2019:i:c:p:38-48
    DOI: 10.1016/j.regsciurbeco.2018.11.002
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    References listed on IDEAS

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    Cited by:

    1. Shukla, Sumedha & Arora, Gaurav, 2022. "A rank similarity test for quantile treatment effects in conjunction with propensity score matching: An application to crop yield impacts of agricultural credit," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322569, Agricultural and Applied Economics Association.
    2. Rui Evangelista & João Andrade E Silva & Esmeralda A. Ramalho, 2021. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Working Papers REM 2021/0186, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Evangelista, Rui & Silva, João Andrade e & Ramalho, Esmeralda A., 2022. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Energy Economics, Elsevier, vol. 109(C).
    4. Zhang, Yixiang & Li, Juan & Tao, Wenwen, 2021. "Does energy efficiency affect appliance prices? Empirical analysis of air conditioners in China based on propensity score matching," Energy Economics, Elsevier, vol. 101(C).
    5. Ming-Yi Huang, 2023. "Analyzing the effects of green building on housing prices: case study of Kaohsiung, Taiwan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1205-1235, February.
    6. Hajime Seya & Kay W. Axhausen & Makoto Chikaraishi, 2020. "Spatial unconditional quantile regression: application to Japanese parking price data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(2), pages 351-402, October.

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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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