Stated WTP and rational WTP: Willingness to pay for green apartments in Sweden

Abstract Green buildings are expected to require lower operating costs, provide better indoor environment and have a lower impact on the environment than conventional buildings. Consequently, if renting or buying green property is more beneficial, a customer may be willing to pay extra for green apartment. The aim of this paper is to study stated and rational willingness to pay for green apartments in Sweden. A database consisting of responses from 477 occupants living in green and conventional multi-family buildings was used to investigate the existence of WTP and to test the difference in opinion between respondents living in green or conventional buildings and condominiums or rental apartments. The responses indicate that people are prepared to pay more for very low-energy buildings but not as willing to pay for a building with an environmental certificate. It was found that interest in and the perceived importance of energy and environmental factors affect the stated WTP. The results indicate that a stated willingness to pay for low-energy buildings of 5% can be considered a rational investment decision.