Willingness to pay for improvements in environmental performance of residential buildings

The aim of this study is to determine preferences for the environmental factors of residential buildings by using two different methods: the conjoint analysis and ranking method. We tried to identify consumers' monetary value regarding environmental performance by testing their Marginal Willing to Pay (MWTP). A survey was conducted in Seoul, Korea to clarify the preference and monetary value of four selected attributes representing environmental performance. These attributes are reduction of energy bills, reduction of CO2 emissions, reduction of volatile organic compound emissions, and application of information technology facilities. The result can be summarized as follows. The MWTP for 1% reduction of CO2 emission is estimated about $377 USD, being 2 times higher than that for reduction of VOC emissions and almost same as that for the reduction of energy bills. The energy bill is most preferred and IT facilities are least preferred in ranking method. Preferences vary according to respondents' socio-demographic factors and the numerical information in conjoint analysis makes strongly reflect them.

► We carried out questionnaire based on ranking method and conjoint analysis.
► The willingness to pay to reduce CO2 emissions is 1.3 times higher than market price.
► This implies sustainability in the current housing market.
► According to ranking method, reduction of energy bills is most preferred.
► Numerical information in conjoint analysis makes reflect respondents' social factors.