Time for a little research update...
The European Economic Review has just posted the papers of last year's conference on Green Building, the Economy, and Public Policy. Piet Eichholtz and I wrote an obituary for our collaborator John Quigley. After that, there are some good papers on residential energy consumption in California (Chong) and Holland (Brounen, Kok and Quigley), some interesting insights into green building in China (Zheng, Wu, Kahn and Deng) and an important paper on the capitalization of solar panels into home prices, using data from San Diego and Sacramento (Dastrup, Zivin, Costa and Kahn). This should be enough reading material for a long European holiday. (I'd be happy to send PDFs of the other papers, risking a lawsuit of Elsevier.)
I'm also excited about the publication of my paper on Portfolio Greenness and the Financial Performance of REITs, in the Journal of International Money and Finance. This paper is getting traction -- I've been talking with the USGBC and NAREIT about constructing a "green" property index for US REITs, based on the observed greenness of REIT portfolios. That should be of interest for mutual fund managers that want to attract SRI capital (apparently there's enough of that -- the US Social Investment Forum estimates that SRI now encompasses an estimated $3.07 trillion out of $25.2 trillion in the U.S. investment marketplace today).
On the new paper front, I've been working with Matt Kahn on the capitalization of "green" labels in the California housing market. There's some traction of LEED for Homes, there's a local label dubbed "GreenPoint Rated" and of course there's Energy Star. The diffusion of these labels is certainly not comparable with the rapid adoption of "green" labels in the commercial market, but using 1.6mln tramsactions of single-family homes, we estimate a standard hedonic pricing model, and then tease out heterogeneity in the label premium. (Yes, there is a premium...!) Working with Matt of course implies looking at the "Prius Effect" (do environmentalist communities value green attributes more?). But we also address consumer rationality: are private homeowners willing to pay more for energy efficiency in hotter areas, with higher energy prices? The results are quite interesting, even though it is early days for large sample studies on green labels in the residential housing market. The paper will be released on July 19, so keep that patience.