In this investigation, I will be basing hypothesis testing on the hedonic pricing theory. Essentially, this theory states that the price of a good is determined by the various characteristics of that good. Therefore, more desirable characteristics will lead to a higher price of the good. In the case of this study, third-party verification is the characteristic of interest, which is essentially a written guarantee of quality. By bringing in a third-party to verify a building’s claim of sustainability, the risk of whether the property is truly environmentally friendly or not is taken away. This then leads me to my hypothesis that green-certified houses that are third-party verified will carry a higher price premium than green-certified houses without this verification.
This article is based on Mr. Bolton's fall semester senior seminar project. His Honors project of the same title is available online.
Recommended CitationBolton, Raymond () "The Value of Third-Party Verified Green Residential Housing in the Chicagoland Area," The Park Place Economist: Vol. 26
Available at: https://digitalcommons.iwu.edu/parkplace/vol26/iss1/10