The decision-making process and willingness to pay for green dwelling

Abstract: Title The decision-making process and willingness to pay for green dwelling Seminar date 2015-05-26 Course FEKN90 Master Thesis in Business Administration (Level D), 30 ECTS Authors Emil Rydén and Robert Waszkiewicz Supervisor Matts Kärreman Key words Consumer behavior, willingness to pay, green dwelling, energy efficiency gap, sustainability, sustainable development Purpose The purpose of this study is to add insight into the decision process of consumers who have bought a green dwelling and what factors affected their willingness to pay. This insight can be used by decision makers, developers, real estate agents, policy makers, and other affected parties to make better informed decision in order to spur the development of green dwelling. Theoretical perspective The theoretical framework builds on previous literature about individual values, willingness to pay, bounded rationality, the energy efficiency gap, and consumer behavior. Methodology The study is a qualitative study with mostly an inductive approach. The aim of the research has been to study a social phenomenon and thus constructivism has been adopted. The empirical data has been gathered through semi-structured interviews and semi-structured telephone interviews and analyzed in a thematic way. Empirical foundations From the empirical findings of consumers’ post hoc purchase/rent of green dwelling, we develop a new and improved framework that can be used as an explanation model for consumers’ slow adoption of green dwelling. Conclusions We conclude that even consumers who have purchased a green dwelling still value regular aspects such as accessibility and apartment size higher than green attributes. Furthermore, we conclude that bounded rationality, externalities, and contextual factors all have big parts as explanatory variables for the low adoption of green dwelling.