An Economic Analysis of Leadership in Energy and Environmental Design (LEED) Certified Buildings and College Desirability

Environmental sustainability is a relatively recent and growing phenomenon that has spread across college campuses. Students may be attracted to environmental values that schools exhibit on tours, and potentially increase student demand or willingness to pay for that college. A clear way for colleges to market their sustainability initiatives to prospective students is through “green” buildings. The most widely known and utilized certification system, Leadership in Energy and Environmental Design (LEED), signifies a “green” building and recently institutions of higher education have become involved in the certification process. In this study I explore the impact of LEED certified buildings on the desirability of colleges, measured in total number of applications, total admissions and the total yield admitted. Using a sample of the Carnegie Classification for Baccalaureate Colleges: Arts and Sciences over the years 2007 through 2017, I determine the total number of LEED certified buildings a college has on their campus. My findings show that an additional LEED certified building increases the number of applicants a college receives by about 116 and its admission by about 41 students, but has no significant impact on the yield or selectivity. Once I include controls for time-varying factors affecting students in a college, LEED buildings do not have a significant impact on any measure of college desirability. The findings in this study ultimately imply that LEED certified buildings may have an impact on where students choose to apply, but not where they actually attend.