While green-labeled buildings have been found to sell at a premium compared to nearby
controls with similar observable characteristics, the voluntary nature of the labeling
decision implies green-labeled buildings may have different unmeasured characteristics
that may account for at least a portion of the premium. Therefore, it is unclear whether
green-labeled building premiums are a causal effect of the labels. I use data on repeat
sales transactions and detailed hedonic characteristics to test whether green-labeled
office buildings were selling at a premium before they were labeled, and combine these
results with post-labeling price premium estimates to identify realized cost-benefit ratios
for green-labeling policies. The data suggest the causal net benefits of green labels
range from 11.50â19.95 per square foot. The estimated net benefits are smaller than
previous estimates that have focused solely on the benefits and ignored the potential
biases from nonrandom selection