Willingness to pay premium prices for green buildings: evidence from an emerging economy

Abstract

The building sector is one of the major contributors to greenhouse gas (GHG) emissions, which may impede the achievement of Malaysia’s intended nationally determined contribution (INDC) by 2030. Therefore, this paper is aimed at identifying the underlying factors that affect working adults’ willingness to pay (WTP) premium prices for green buildings. Data were collected from a total of 1198 respondents and analyzed using structural equitation modeling partial least square (SEM-PLS) to measure the willingness to pay for green buildings among working adults in Malaysia. The findings reveal that environmental literacy affects environmental belief as well as awareness of consequences among working adults in Malaysia. The findings also reveal that incentives for green building buyers have a significant impact on perceived behavioral control, while awareness of consequences has a significant influence on ascription of responsibility. However, the results reveal that awareness of consequences does not influence buyers’ willingness to pay for green buildings. Moreover, the ascription of responsibility and perceived behavioral control have a significant effect on willingness to pay for green buildings. The findings of this study will help the concerned authorities to take appropriate steps to promote willingness to pay for green buildings, which will contribute significantly to the realization of INDC by 2030 as part of the Paris Agreement.