Modeling the willingness to pay for energy efficient residence in urban residential sector in China

Whether and how to share the incremental cost of energy efficient residence compared with common buildings between housing developers and buyers is an urgent problem to be solved in promoting energy efficient residence. This study estimates urban residents' willingness to pay (WTP) for energy efficient residence in Beijing and Changchun in China to provide important reference for this issue. The revised norm-motivated consumer choice model is used to identify the key factors in the two decision-making stages of determining WTP. Based on survey data and using probit and interval regression models, it shows that energy-saving revenue and incremental cost are the key factors affecting whether or not to buy energy efficient residence, and the preference for positive personal image only has a significant positive effect in Beijing. The mean and median WTP of Beijing residents are about 340 Yuan and 405 Yuan per square meter, respectively, whereas those of Changchun residents are about 350 Yuan per square meter. Policies targeting the energy saving and incremental cost of energy efficient residence and tailored to local residents' preferences can stimulate the promotion of energy efficient residence effectively.