ISSN: 2222-6990
Open access
Purpose – This paper aims to determine the green features that homebuyers in Penang consider for their green building choice, as well as to investigate the price premium that prospective homebuyers are willing to pay for green buildings as compared with normal buildings. Design/methodology/approach – This study used a quantitative approach. There are twelve green features identified and grouped under three independent variables namely energy efficiency, indoor environment quality and water efficiency. The survey was a cross-sectional study and a total of 120 valid responses were collected using a self-administered online survey questionnaire among Penangites in Malaysia. Multinomial logistic regressions were run using Stata 17.0 for the data analysis. Findings – The result shows that indoor environment quality is the major factor that will influence the home buyers’ willingness to pay for 11% to 29% green buildings’ price premium. Those features are natural ventilation design, sufficient daylighting, low-toxicity finishes and furnishing, and sound insulation design.
Practical implication – The study provides insights for policymakers and developers to understand the needs for home buyers so that green buildings can be successfully launched and appreciated in the country. Originality – The understanding of the homebuyers’ green features and the range of willingness to pay for price premium may provide a guide to the developer in determining the design and price range for green building development.
Boermans, M. A. and Kattenberg, M. (2012). ‘Estimating Reliability Coefficients with Heterogeneous Item Weightings Using Stata: A Factor Based Approach’, SSRN Electronic Journal. doi:10.2139/ssrn.2026433.
Chau, C. K., Tse, M. S. and Chung, K.Y. (2010). ‘A choice experiment to estimate the effect of green experience on preferences and willingness-to-pay for green building attributes’, Building and Environment, 45(11), pp. 2553–2561. doi:10.1016/j.buildenv.2010.05.017.
Cleff, T. (2019). Applied Statistics and Multivariate Data Analysis for Business and Economics: A Modern Approach Using SPSS, Stata, and Excel, Springer Nature Switzerland AG. doi:10.1007/978-3-030-17767-6.
Darko, A. and Chan, A.P.C. (2017). ‘Review of Barriers to Green Building Adoption’, Sustainable Development, 25(3), pp. 167–179. doi:10.1002/sd.1651.
Department of Statistics Malaysia (2021). ‘The Source of Malaysia’s Official Statistics’. Available at:
https://www.dosm.gov.my/v1/index.php?r=column/cone&menu_id=SEFobmo1N212cXc5TFlLVTVxWUFXZz09.
Designing Buildings (2022). Indoor environmental quality. Available at:
https://www.designingbuildings.co.uk/wiki/Indoor_environmental_quality (Accessed: 11 June 2022).
Dwaikat, L. N. and Ali, K.N. (2018). ‘The economic benefits of a green building – Evidence from Malaysia’, Journal of Building Engineering, 18, pp. 448–453. doi:10.1016/j.jobe.2018.04.017.
Green Building Index (2014). Residential new construction (RNC) design reference guide and submission format. Available at:
https://www.greenbuildingindex.org/Files/Resources/GBI Tools/RNC Reference Guide V3.1.pdf.
Green Building Index (2022). Green Building Index. Available at: https://www.greenbuildingindex.org/ (Accessed: 19 April 2022).
Green Buildings and Townships Working Group (2020). Penang Green Agenda 2030: Green Buildings and Townships. Available at: https://www.pgc.com.my/2020/wp-content/uploads/2020/09/8_PGA-Sectoral-Formatted-Final-Report_GOV.pdf (Accessed: 19 April 2022).
Hu, H., Geertman, S. and Hooimeijer, P. (2014). ‘The willingness to pay for green apartments: The case of Nanjing, China’, Urban Studies, 51(16), pp. 3459–3478. doi:10.1177/0042098013516686.
Kats, G. H. (2003). Green Building Costs and Financial Benefits, Massachusetts Technology Collaborative. Available at: http://staging.community-wealth.org/sites/clone.community-wealth.org/files/downloads/paper-kats.pdf (Accessed: 2 May 2022).
Kwak, S.-Y., Yoo, S.-H. and Kwak, S.-J. (2010). ‘Valuing energy-saving measures in residential buildings: A choice experiment study’, Energy Policy, 38(1), pp. 673–677. doi:10.1016/j.enpol.2009.09.022.
Lee, Y. Y., Azmi, M. S. I. and Lee, Y. H. (2020). ‘A study on the challenges of implementing green building concept in Sarawak, Malaysia’, IOP Conference Series: Materials Science and Engineering, 943(1), p. 012022. doi:10.1088/1757-899X/943/1/012022.
Lind, D. A., Marchal, W.G. and Wathen, S.A. (2019) Basic Statistics for Business & Economics., McGraw Hill.
Liu, X. (2016). Applied Ordinal Logistic Regression Using Stata: From Single-Level to Multilevel Modeling, SAGE Publications, Inc.
Lop, N. S., Che Ahmad, A. and Nik Zulkipli, N.A.D. (2019). ‘The implementation of green building in Malaysian Construction industry: determination of key success factors’, Malaysian Journal of Sustainable Environment, 1(1), pp. 64–79. doi:10.24191/myse.v1i1.5561.
Paul von, P. (2003). ‘The business case for high-performance green buildings: Sustainability and its financial impact’, Journal of Facilities Management, 2(1), pp. 26–34.
Petrucci, C.J. (2009). ‘A Primer for Social Worker Researchers on How to Conduct a Multinomial Logistic Regression’, Journal of Social Service Research, 35(2), pp. 193–205. doi:10.1080/01488370802678983.
Phee, B. P. (2018). Planning of Eco-City & Green Technologies in Province Wellesley, Penang, Malaysia, 14th Asia Pacific Eco-Business Forum. Available at: https://eri-kawasaki.jp/english/wp-content/uploads/2019/02/3bcceb2d93a9a71c89b7954fbd60f6e5.pdf.
Samer, M. (2013). ‘Towards the implementation of the Green Building concept in agricultural buildings: A literature review’, Agricultural Engineering International: CIGR Journal, 15(2), pp. 25–46.
Sheth, K.N. (2017). ‘Water Efficient Technologies for Green Buildings’, International Journal Of Engineering Innovation And Scientific Research, 1(3), pp. 5–10.
USGBC (2014). ‘Green Building 101: What is indoor environmental quality?’ Available at: https://www.usgbc.org/articles/green-building-101-what-indoor-environmental-quality.
Vyas, G. S. and Jha, K. N. (2016). ‘Identification of green building attributes for the development of an assessment tool: a case study in India’, Civil Engineering and Environmental Systems, 33(4), pp. 313–334. doi:10.1080/10286608.2016.1247832.
Wang, S., Yan, C. and Xiao, F. (2012). ‘Quantitative energy performance assessment methods for existing buildings’, Energy and Buildings, 55, pp. 873–888. doi:10.1016/j.enbuild.2012.08.037.
Zhang, D. and Tu, Y. (2021). ‘Green building, pro-environmental behavior and well-being: Evidence from Singapore’, Cities, 108, p. 102980. doi:10.1016/j.cities.2020.102980.
Zhang, L., Wu, J. and Liu, H. (2018). ‘Turning green into gold: A review on the economics of green buildings’, Journal of Cleaner Production, 172, pp. 2234–2245. doi:10.1016/j.jclepro.2017.11.188.
Chin, P. N., & Tan, L. K. (2024). Homebuyers’ Green Features Preferences and Willingness To Pay: Evidence From Penang, Malaysia. International Journal of Academic Research in Business and Social Sciences, 14(11), 125–144.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode