Factors Affecting the Willingness of Arab Residents in Israel to Pay for Green Buildings: Results of a Survey among Potential Homebuyers in Acre and Nazareth

Abstract

Green buildings (GBs) enable the efficient use of resources while minimizing environmental impacts. Yet, GBs’ worldwide uptake is still hindered by various barriers, including the perception of being significantly more expensive than conventional ones. In Israel, several studies have investigated the willingness of prospective homebuyers to pay price premium (PP) for GBs and the associated affecting factors. However, these studies focused solely on the Jewish population and no similar study was carried out in the Arab sector. The present study attempts to bridge this knowledge gap by conducting a face-to-face survey among 215 potential Arab homebuyers in two cities in Israel characterized by a high percentage of Arab residents. Study results were compared to those found in a previous study in the Israeli Jewish sector. Findings indicate that despite their lower familiarity with the GB concept and attributes, prospective Arab homebuyers are willing to pay a much higher PP (10.56% compared to 6.58%) for purchasing a green apartment. This unexpected finding may be attributed to the higher motivation that Israeli Arabs have to improve their housing conditions and social status, which can be related to their larger households, higher household crowding, and stronger perception of housing as a long-term investment.

1. Introduction

Green buildings (GBs) create and use efficient and pro-environmental models for the design, construction, operation, maintenance, and renovation of buildings [1,2]. In addition to their environmental advantages, GBs can increase safety, durability, and resilience under extreme environmental conditions, such as progressive collapse and seismic activity [3,4]. The growing awareness to these benefits has led to the emergence of different GB rating systems around the globe, such as LEED (Leadership in Energy and Environmental Design) in the USA [5] and BREEAM (Building Research Establishment Environmental Assessment Method) in the United Kingdom and the European Union [6]. In Israel, IS 5281 (GB standard) [7] was first launched in 2005 and over the years has been upgraded and adjusted several times (in 2011, 2016, 2018, and 2019), until it became mandatory in 2022 [8].

The rising popularity of GB rating systems and the increasing attention given to pro-environmental behaviour and energy-saving are reflected in a clear upward trend of GB uptake worldwide [2,9,10,11]. Israel has also seen an increase in GB adoption, with 202 GBs constructed in 2021 and 143 in 2022, bringing their total number to 792, of which 636 are residential [12]. Nevertheless, the penetration rate of GBs in the Arab sector is still very low, with only 18 buildings certified by February 2023 (received from the Green Building Department, Ministry of Environmental Protection, on 13 February 2023), none of which are residential.

As found in previous studies, the widespread adoption of GBs by prospective homebuyers is hindered by numerous barriers, including the perception that the purchasing price of a GB apartment is significantly higher than that of a conventional one [13,14,15]. Another significant barrier is the limited knowledge regarding GBs’ benefits, as emphasized by Portnov et al. [16] and Ofek and Portnov [17].

Several studies have explored the homebuyers’ willingness to pay (WTP) price premium (PP) for purchasing a GB—that is, the percentage by which GBs’ purchasing price exceeds a benchmark price of conventional apartments with similar characteristics [17,18,19,20,21]. Findings reveal a high variation in the acceptable PP across countries, ranging between 2% and 15% [16,19,21,22,23,24,25], depending on the rating level and perceived benefits. In Sweden, for instance, GB PP has been estimated to range from 2% to 8% [21], while in Switzerland, it was found to range between 3% and 13% [19]. In one study conducted among the Jewish population in Israel, the PP size was found to range from 7% to 10% [16], while in another study, it was found to reach 6.58% on average [24]. In Australia, the PP size was found to range from 10% to 15% [22], while in Pakistan, it was found to reach 11.07% on average [23].

The economic, environmental, and social factors that may influence prospective homebuyers’ intentions to purchase a green apartment and to pay PP for it have also been studied [16,17,26]. It was found that the economic drivers behind GB preference include savings on maintenance [16,17], improving energy efficiency [19,24,25,27], expectation of increase in future home value [24,28], and government incentives [29,30,31].

Environmental motives include pro-environmental attitude [32,33,34,35], acknowledgement of environmental responsibility [36], familiarity with the GB concept and benefits [16,17,24], improving indoor living conditions and air quality, and reducing exposure to toxic construction materials [30,36,37].

GBs’ preference is also influenced by social factors, such as socio-demographic characteristics (e.g., education, income, gender, age) and the desire to improve society and uphold its values [16,17,24,36].

It should be noted, however, that the geographical/cultural coverage of research on the WTP PP for GBs and the factors influencing it is still limited, as most studies were conducted in Europe, North America, and the Far East [16,19,21,24,25]. Hence, previous findings may not be fully applicable to homebuyers in other cultures, such as Arabic, which might differ in awareness, perceptions, and preferences regarding GBs.

Although many Arab countries show a significantly increased interest in green construction and establishing GB standards, the GB market in most of them is still immature. During the past decade, several Arab counties have established GB standards that are similar to those of the United States and Europe. Well known examples are the Estidama Green Pearl standard in Abu Dhabi [38], Green Pyramid system in Egypt [39], ARZ in Lebanon, and GSAS in Qatar. The smart cities movement is also a trending topic in Arab countries, particularly in the Gulf region, with notable projects like the Line in Saudi Arabia [40] and Masdar City in Abu Dhabi [41]. However, only very few attempts have been made so far to estimate the WTP for GBs in Arabic cultures [42,43,44,45] and knowledge about the factors affecting the WTP is also scarce. The limited findings indicate a low rate of GB implementation and a lack of awareness, resulting mainly from the absence of targeted incentives and policies [42,45]. Thus, for example, Issa and Al Abbar [43] found a low rate of GB adoption in the Middle Eastern Arab countries, and Lambourne [44] estimated the acceptable PP for commercial and residential GBs in the UAE as only 1%.

Review of the literature indicates that the research based on the WTP for GBs in Arab populations is limited. The present study attempts to narrow this knowledge gap by examining the range of PP that Israel’s prospective Arab homebuyers are willing to pay for GBs and identifying its associated factors. While previous studies on the WTP PP for GBs in Israel focused solely on the Jewish sector [17,24], this study will focus on the Arab sector, which constitutes more than one fifth of the total population.

As the findings show, despite their relatively lower familiarity with the GB concept and benefits, Israeli Arabs stated a higher WTP PP for GBs than that found by Ofek et al. [24] among Israeli Jews (10.56 vs. 6.58% on average). We explain this surprising result by the fact that Israeli Arabs, who often live near their extended families in densely populated towns and villages, have, as a result, limited housing choices compared to Jewish homebuyers. Therefore, they strive to improve their living conditions even at a higher cost and also perceive GBs as a status symbol.

Based on these findings, we recommend that future intervention efforts should focus on educational campaigns targeted at the Arab sector and at improving their knowledge about GBs and their benefits. Such campaigns may be carried out via different types of media, as well as in educational systems and community centers. We also suggest that financial incentives, such as tax reductions and discounts on electricity tariff [17,24], ought to be offered to GBs’ homebuyers.

Arab citizens make up ~21% of Israel’s total population and most of them live in the northern region of the country [46]. Their average household size is much larger than that of the Jewish citizens at 4.30 and 3.05, respectively [46], and their average educational level is significantly lower, with only 29% of the women and 20% of the men aged 25–34 having 16 years of schooling or more, compared to 48% and 41% in the Jewish population, respectively [47].

Focusing on potential Israeli Arab homebuyers, the present study aims to answer the following main questions:

• What is their level of familiarity with various aspects of GBs and what are their attitudes towards GBs?
• What is the average PP that they are willing to pay for purchasing a green apartment or house?
• How is the acceptable PP influenced by their knowledge, attitudes, and personal characteristics, as well as by government incentives?
• Are there significant differences between Israeli Arabs’ WTP and influencing factors and those found among Israeli Jews in previous studies?

2. Factors Affecting WTP GB PP

Several studies [17,18,19,20,21] have explored the factors affecting the WTP PP for GBs. These factors can be categorized into the following six groups: familiarity with the GB concept, environmental awareness and knowledge, environmental concerns, savings on home maintenance, government incentives, and homebuyers’ socio-demographic characteristics. The various influencing factors are discussed in more detail in the following subsections.

2.1. Familiarity with the GB Concept and Benefits

Previous studies have found a positive relationship between the WTP for GBs and familiarity with the concept and its benefits [17,18,26,37,48,49]. For instance, a study conducted by Ofek and Portnov [17] among prospective Israeli Jewish homebuyers revealed that the WTP is influenced by the benefits associated with GBs, such as a healthier living environment. Similarly, a study performed by Durdyev and Ihtiyar [37] in Cambodia found that health considerations are significant predictors of GB purchase. Another study, conducted by D. Zhang and Yong [49] in Singapore, also found that tangible green features (e.g., ventilation and overall quality of the indoor environment) influence homebuyers more than intangible ones (e.g., energy efficiency). Similarly, in China, Liu et al. [48] and Zhao and Chen [26] found that health and comfort are the main predictors for GB purchase. Similar results were also found in Abu Dhabi by Abuamer and Boolaky [18], who showed that energy efficiency and indoor environmental quality are significant predictors of the WTP PP for GBs.

Energy savings is another well-known benefit associated with GBs [13]. Studies that examined consumer’s WTP for future energy savings in residential buildings found that this factor significantly affects the GB PP [16,19,24,25,27]. In Switzerland, for instance, Banfi et al. [19] found that the GB PP ranges between 3% and 13%, depending on the energy-saving level; in Sweden, Zalejska-Jonsson [25] estimated the range of the PP as 3.7–10.0%, depending on the building energy rating level; in South Korea, Kwak et al. [27] found that the households’ marginal WTP varies in response to different energy saving elements, such as the number of windows, window variety, increased wall insulation, and improved ventilation system; in Pakistan, Khan et al. [23] found that energy savings positively influence potential buyers; in Hong Kong, Yau [50] revealed that economic factors, such as reduced utility bills, are the main motives; and in mainland China, Liu et al. [48] found that operation and maintenance savings are the main predictors. To summarize, previous studies highlight the importance that prospective homebuyers attach to energy and maintenance savings.

However, when comparing the WTP for energy savings to WTP for other environmental benefits, studies show conflicting results. While Chau et al. [20] demonstrated a higher acceptable PP among Hong Kong residents for energy savings than for other benefits, such as improved indoor environmental conditions and water and noise level reduction, Mandell and Wilhelmsson [21] found that households in Stockholm, Sweden are willing to pay a lower PP for energy-efficient systems (2–4%) than for water reduction technologies (5–8%).

2.2. Environmental Awareness and Knowledge

Previous studies also provide evidence that environmental knowledge positively affects green purchases in general, for e.g., [51,52,53], and homebuyers’ decisions regarding GBs in particular [21,30,36,54]. For example, using the stated preference method, Hu et al. [36] identified awareness to environmental pollution as one of the main predictors affecting WTP for GBs in China. Similarly, based on hedonic modelling, Mandell and Wilhelmsson [21] determined that households in Sweden, which are considered as having a high environmental awareness, tend to demonstrate a higher WTP for housing attributes, such as ventilation, insulation, reduction of water consumption, and reduction of heating expenses. In another study conducted in Cambodia, Durdyev and Tokbolat [30] applied structural equation modelling to identify environmental awareness as the main trigger for purchasing GBs. Similar results were also found in Malaysia by Rashid and Shaharudin [54], who used partial least square (PLS) modelling to demonstrate that general knowledge on environmental issues is the main driver for purchasing green homes. To sum up, previous studies indicate that environmental knowledge is vital for promoting GBs’ uptake.

2.3. Environmental Concerns

Environmental concerns reflect the individual’s worries and considerations about human activities that might adversely influence the environment [55]. Several studies have demonstrated that such concerns motivate homebuyers’ GB purchasing decisions, for e.g., [26,29,30,31,54,56]. For example, in a study conducted in Malaysia, Tan [56] showed that concerns about air and water quality, biodiversity, ecosystems, and conservation of natural resources are significant predictors of homebuyers’ GB purchasing decisions. Similar findings were found in another study carried out in Malaysia by Durdyev et al. [29], as well as in a study conducted in Cambodia by Durdyev and Tokbolat [30].

It can thus be concluded that the shift towards environmentally conscious choices requires proactive efforts from all stakeholders to align their strategies and actions with the growing emphasis being placed by consumers on environmental sustainability.

2.4. Government Incentives

Several studies have indicated that government incentives are among the most significant factors influencing the purchase of green homes, for e.g., [29,31]. Such incentives include, inter alia, tax reductions, direct grants, and soft loan incentives [29,30]. The importance of such motivators was demonstrated in Malaysia by Rashid and Shaharudin [54] and by Durdyev et al. [29], in China by Li et al. [57] and by L. Zhang et al. [31], and in Cambodia by Durdyev and Tokbolat [30].

It should be noted that although monetary interventions can stimulate GBs’ adoption, such polices need to be supplemented with the provision of GB knowledge in order to increase their effectiveness.

2.5. Socio-Demographic Characteristics

Several studies have focused on the link between consumers’ socio-demographic characteristics, such as the socioeconomic status, income, education, gender, and age, and their WTP PP for GBs [23,36,48,50,57]. Regarding the socioeconomic status, Hu et al. [36], for example, found that richer Chinese consumers were prepared to pay more for comfortable and healthier accommodations. With regard to family income, a positive effect was found in most studies [50,57], while one study, carried out in Pakistan, found a negative correlation [23]. Education level was also found to be a significant predictor, as revealed, for instance, by Khan et al. [23] in Pakistan and by Li et al. [57] in China. As to age, Khan et al. [23] showed that elder Pakistani homebuyers had a higher WTP for GBs compared to younger ones. Regarding the influence of gender, studies show conflicting results. While Khan et al. [23] found that men in Pakistan are willing to pay a higher PP than women, Li et al. [57] revealed that women in China tend to accept a higher PP than men. The different results indicate that further research is needed to determine the influence of socio-demographic variables on the WTP for GBs.

2.6. Knowledge Gaps

To sum up, previous studies provide evidence that a slow uptake of GBs may be attributed to a lack of familiarity with the GB concept and benefits, a lack of environmental knowledge, lower income and education level, and insufficient government incentives. It should be emphasized though that the findings’ generalizability is hindered by the likely heterogeneous nature of different cultural and ethnic groups.

The main novelty of this study lies in exploring, for the first time, the WTP PP for GBs among Israeli Arabs, who significantly differ from Israeli Jews in a range of socio-demographic characteristics. To allow comparison, this study applies the same questionnaire and methodology that were used by Ofek et al. [24], who focused on the Jewish sector.

3. Methodology

The study is based on a face-to-face questionnaire survey aimed to explore the size of PP that potential Israeli Arab homebuyers would be willing to pay for GBs and to identify the factors that influence this choice. The results are compared with those of a previous study conducted among the country’s potential Jewish homebuyers [24].

3.1. Study Population

The survey was carried out in two cities in the northern region of Israel—Acre (Akko) and Nazareth, which have a large proportion of Arab residents (Figure 1).

By the end of 2020, the population of Acre was 49,614, with 66.9% Jews and 33.1% Arabs, 91.1% of whom were Muslims, and the population of Nazareth was 77,925, 72.8% of whom were Muslims and 27.2% Christians [58]. The average gross monthly wage per employee in 2019 was NIS 7,907 (about USD 2260) in Acre and NIS 6959 (about USD 1993) in Nazareth [58], compared to NIS 10,291 (about USD 2948) in the total population [59].

To allow comparison, we used the questionnaire developed by Ofek et al. [24] for exploring the WTP for GBs in the general population in Israel, after conducting a few necessary minor adjustments. To ensure understanding and accuracy, the questionnaire was translated into Arabic and back into Hebrew. As shown in Chapter 4, Ofek et al. [24] used a representative sample of 500 participants from the Jewish general population of the country (with the ±4.5% error margin), while our study was conducted among 215 participants from the Arab urban sector (we used a sample size calculator (https://www.surveymonkey.com/mp/sample-size-calculator/, accessed on 1 February 2021) with the following inputs: population size—Acre (50,000 residents), Nazareth (78,000 residents); confidence level = 95%, and margin of error = 10%. In each city, the required sample size was determined as 96 (192 respondents together), yet we had 215 respondents).

The questionnaire consists of four parts, with the first part designed to assess the participant’s familiarity with the GB concept and its benefits. For each statement in this part, the respondents were asked to rate their degree of agreement or disagreement on a 10-point Likert scale (where 1 represents “disagree” and 10 represents “strongly agree”), or to choose “I don’t know”; in the second part, respondents were asked to choose, on a scale of 0% to 30%, the size of PP they would be willing to pay for a green apartment compared to a conventional one; in the third part, participants were asked to assess the level of impact of various GB incentives (phrased as statements and classified into categories) on their WTP, using a 10-point Likert scale (where 1 is “not affecting” and 10 is “strongly affecting”), or to choose “I don’t know”; and the fourth part was designed to obtain demographics (city of residence, age, gender, education level, income, marital status, household size, and religion) of the survey participants (see Appendix A).

The questionnaire was administered by the interviewers on weekends during March–July 2021 in public places, such as parks, supermarkets, and cafes in the studied cities. Respondents were randomly selected to represent gender and various age groups above 18.

3.2. Research Hypotheses

As previous studies show, familiarity with GBs’ benefits, as well as higher education and income level, increase the acceptable PP that potential consumers are willing to pay [17,18,26,37,48,49]. Accordingly, we hypothesized that familiarity with the GB concept would be found to positively correlate with the WTP PP for GBs (H1) and that there would be a lower WTP PP for GBs in the Arab sector in comparison to the Jewish sector (H2).

3.3. Data Analysis

The questionnaires’ data were analyzed in six steps. First, we examined PP averages for different categories of gender, education, age, income, and city of residence. Second, descriptive statistics were performed to identify the distribution of the variables that reflect the prospective homebuyers’ familiarity with GBs, their WTP for GBs, and its associated factors. Next, we performed a t-test for independent groups to examine the mean differences between the study population and the general population as reported in [24] and to analyze the factors affecting the WTP in our study cohort. We also conducted a multivariate regression analysis to determine whether familiarity with GBs and their benefits, government incentives, and socio-demographic characteristics of the respondents are significantly correlated with the acceptable PP. Finally, as many factors affecting the GB choice were found to be strongly collinear, we applied factor analysis to extract orthogonal variables for regression analysis. The analysis was performed separately for each study city and jointly for both cities, and the results were compared to those found by Ofek et al. [24] in the general Jewish Israeli population.

4. Results

4.1. General Trends

Descriptive statistics of the study participants were compared to those of the participants from the general Jewish population in Israel, as reported by Ofek et al. [24]. As

Table 1. Selected socio-economic characteristics of the present survey’s participants, compared to those in Ofek et al.’s [24] study and general and Arab population in Israel.

Variable	This Study a		Ofek et al. (2018) b		General Jewish Population of Israel c	Arab Population of Israel d
	% or [Value]	Std. Dev.	%or [Value]	Std. Dev.	%or [Value]	% or [Value]
Gender:
• Male	73.5	-	49.8	-	49.39	50.6
• Female	26.5	-	50.2	-	50.6	49.38
Education g:
• Elementary school	8.4	-	7	-	20.4	43.4
• High school	42.3	-	16.7	-	41.9	38.5
• Professional	22.3	-	30.6	-	7	3.4
• Academic	27.2	-	33.6	-	30.7	14.7
• Total years of schooling	12.92	2.89	14.72	2.48	NA	NA
Age group h:
• 20–29 yo	17.2	-	27.9	-	12.89	18.07
• 30–39 yo	38.1	-	28.4	-	13.05	12.48
• 40–49 yo	26	-	24.9	-	12.01	11.13
• 50–59 yo	14	-	12.9	-	9.35	8.29
• 60–69 yo	4.2	-	6	-	8.89	4.68
• 70 yo and above	0.5	-	-	-	9.5	3.09
• Average age, years	39.59	10.89	38.42	11.94	NA	NA
Monthly income, NIS
(NIS 1 = USD 0.3059 i):
• Up to 6000	20.9	-	36.3	-	NA	NA
• 6001–12,000	53.5	-	39.3	-	NA	NA
• 12,001–18,000	19.5	-	19.2	-	NA	NA
• 18,001–24,000	2.3	-	3.5	-	NA	NA
• Over 24,000	3.7	-	1.7	-	NA	NA
• Average income	9420	-	-	-	[12,130] e	[8502] f
City of residence:
• Acre	51.6	-	-	-	-	-
• Nazaret	48.4	-	-	-	-	-

Notes: ^a N = 215, ^b N = 500; ^c general population in Israel at the end of 2020 (source: [60]); ^d Arab population in Israel at the end of 2020 (source: [60]); ^e,f calculated using [61] data on the household’s average monthly wage divided by the average number of income earners in the household; ^g by the level of education in 2017 (source: [62]); ^h by the population group, religion, sex and age in 2020; (source: [60]); ⁱ as of March–July 2021 (source: [63]).

shows, a much higher percentage (73.50%) of participants in our study were males; the average age was similar (39.59 and 38.42 years, respectively), while the average years of schooling was somewhat lower (12.92 and 14.72, respectively). In line with the latter characteristic, the percentage of participants with only high school education in our study was much higher (42.30% compared to 16.70%), although similar to that of the general Arab population (38.5%) and the general Jewish population (41.9%).

4.2. Acceptable Size of GB PP

The acceptable size of PP estimated for prospective Arab homebuyers is presented in Figure 2 jointly for the two studied cities and separately for each city, and they are also compared to the value stated by Israeli Jewish homebuyers as reported by Ofek et al. [24].

As shown in Figure 2, the stated acceptable PP among the participants in both cities (9.89–11.18%) is significantly higher (p < 0.01) than the value stated by potential Jewish homebuyers (6.58%). Furthermore, participants from Acre, which has a higher socio-economic status than that of Nazareth [58], were willing to pay a higher PP (11.18%) than those from Nazareth (9.89%). However, this difference is not statistically significant (p > 0.1).

4.3. Familiarity with the GB Concept, Benefits, and Purchase Motivations

The average levels of the respondents’ familiarity with various aspects of GBs and purchase motivations are shown in Figure 3 and compared to those among prospective Israeli Jewish homebuyers, as reported by Ofek et al. [24]. The results indicate that familiarity with the GB concept (Q1–Q4) and GB purchase motivators (Q5–Q8) among the study participants is relatively low (4.27–7.00 on a 10-point scale), compared to that in the general Jewish population (6.41–8.16 points).

The statements that received the highest scores by the study participants were “GBs reduce environmental impact” (Q2)—(7.00), “GBs reduce economic expenses and increase energy savings” (Q3)—(6.87), and “GBs have a capability of reducing costs and achieving energy savings” (Q7)—(6.79). The lowest scores were assigned to “general familiarity with the GB concept” (Q1)—(4.27) and to two statements related to societal improvement that GBs might introduce: “GBs have a capability of improving society” (Q8)—(5.07) and “GBs help to uphold societal values” (Q4)—(5.32).

Findings thus indicate that potential Arab homebuyers in the studied cities are generally less familiar with GBs and their environmental and social benefits (see Figure 3). In particular, as presented in

Table 2. Familiarity with GB concept, GB benefits, and GB purchase motivations among the survey participants in Acre and Nazareth (jointly) compared to results reported for Israeli Jewish homebuyers [24].

Variable	Present Study	Ofek et al. (2018)	t-Test
General familiarity with the GB concept (Q1)	4.27	6.95	−10.713 *
GBs reduce environmental impact (Q2)	7	8.16	−5.5 *
GBs reduce economic expenses and increase energy savings (Q3)	6.87	7.99	−5.253 *
GBs help to uphold societal values (Q4)	5.32	6.99	−7.248 *
When I purchase a new apartment, I will give priority to a green one (Q5)	6.68	6.41	1.154 ns
GBs have a capability of minimizing environmental impact (Q6)	6.47	7.54	−4.436 *
GBs have a capability of reducing costs and achieving energy savings (Q7)	6.79	7.57	−3.614 *
GBs have a capability of improving society (Q8)	5.07	6.62	−6.292 *

* Indicates a 0.01 significance level, ^ns non-significant.

, the scores of all the statements, except for “When I purchase a new apartment, I will give priority to a green one” (Q5), were significantly lower (p < 0.1) compared to those among Jewish homebuyers. Nevertheless, despite their lower familiarity, Arab respondents declared a higher acceptable PP for GBs than their Jewish counterparts (Figure 2).

4.4. Factors Affecting Support of GBs

The factors affecting the respondents’ WTP PP for GBs, compared to those found among the Jewish population, are presented in Figure 4. The results show that all the factors are rated relatively low (mean = 6.74) compared to the scores (mean = 7.34) reported by Ofek et al. [24]. The statements that received the highest score were “government incentives” (I6)—(7.88) and “creating a healthy living environment” (I5)—(7.59), while the lowest score was assigned to “innovative attitude and improving professional image” (I7)—(4.70). Furthermore, as presented in

Table 3. Factors affecting support of GB among survey participants in Acre and Nazareth (jointly) compared to results reported among prospective Israeli Jewish homebuyers [24].

Variable	Present Study	Ofek et al. (2018)	t-Test for Differences
Rise in energy prices (I1)	6.44	7.07	−2.848 **
Rise in future real estate value (I2)	6.71	7.72	−4.515 **
Lower maintenance costs (I3)	6.7	7.95	−5.996 **
Reduction of the environmental impact of construction (I4)	6.91	6.88	0.139 ns
Creating a healthy living environment (I5)	7.59	7.4	0.944 ns
Government incentives (I6)	7.88	8.51	−3.151 **
Innovative attitude and improving professional image (I7)	4.7	5.65	−3.846 **
Reduction in the costs of building materials (I8)	7.04	7.6	−2.518 *

* Indicates a 0.05 significance level, ** indicates a 0.01 significance level, ^ns non-significant.

, the scores of all the affecting factors, except “creating a healthy living environment” (I5) and “reduction of the environmental impact of construction” (I4), were significantly lower (p < 0.05) compared to those found among prospective Jewish homebuyers [24].

Notably, most policy incentives were ranked higher by the residents of Nazareth than by the residents of Acre. This difference is statistically significant at the 95% and 99% confidence levels, except for the items “Rise in energy prices” (I1) and “Rise in future real estate value” (I2) (see

Table 4. Factors affecting the support of GBs among survey participants in Acre and Nazareth.

Variable	Present Study Acre	Present Study Nazareth	t-Test for Differences
Rise in energy prices (I1)	6.29	6.6	−0.848 ns
Rise in future real estate value (I2)	6.58	6.86	−0.715 ns
Lower maintenance costs (I3)	6.27	7.17	−2.515 *
Reduction of the environmental impact of construction (I4)	6.31	7.56	−3.504 **
Creating a healthy living environment (I5)	7.12	8.11	−2.904 **
Government incentives (I6)	7.28	8.52	−3.727 **
Innovative attitude and improving professional image (I7)	5.29	4.05	3.023 **
Reduction in the costs of building materials (I8)	6.56	7.56	−2.767 **

* Indicates a 0.05 significance level; ** indicates a 0.01 significance level; ^ns non-significant.

). A different ranking was found for the item “Innovative attitude and improving professional image” (I7), which was rated higher by the residents of Acre than by the residents of Nazareth, with a confidence level of 99%.

4.5. Regression Analysis (Phase 1)

The results of the initial regression analysis are reported in

Table 5. Factors affecting WTP for a GB by potential homebuyers—Arab population in this study vs. general Jewish population in Ofek et al. [24] (method: multiple regression analysis, dependent variable—acceptable PP size for GB, %).

Variable	Model 1				Model 2
	Present Study		Ofek et al. (2018)		Present Study		Ofek et al. (2018)
	t b	b a	t b	b a	t b	b a	t b	b a
(Constant)	4.476 **	8.143	1.796 *	3.148	2.059 *	7.341	1.704 *	6.876
Familiarity with the GB concept (on a 10-point scale):
General familiarity with the GB concept (Q1)	1.867	0.335	−0.618	−0.103	1.666	0.317	−0.666	−0.112
GBs reduce environmental impact (Q2)	−1.183	−0.416	−0.955	−0.238	−0.997	−0.363	1.077	−0.268
GBs reduce economic expenses and increase energy savings (Q3)	1.192	0.412	0.556	0.167	1.24	0.436	0.411	0.123
GBs help to uphold societal values (Q4)	0.296	0.079	−0.833	−0.208	0.162	0.045	−0.899	−0.224
When I purchase a new apartment, I will give priority to a green one (Q5)	2.458 *	0.674	0.453	0.088	2.451 *	0.685	0.565	0.11
GBs have a capability of minimizing environmental impact (Q6)	0.622	0.164	0.516	0.143	0.55	0.148	0.521	0.144
GBs have a capability of reducing costs and achieving energy savings (Q7)	−1.115	−0.394	0.934	0.282	−1.119	−0.407	1.05	0.315
GBs have a capability of improving society (Q8)	1.623	0.381	−0.047	−0.013	1.673	0.404	−0.111	−0.030
Reasons for supporting GB incentives (ranking on a10-point scale):
Rise in energy prices (I1)	0.658	0.195	2.755 **	0.479	0.676	0.207	2.616 *	0.454
Rise in future real estate value (I2)	−0.562	−0.146	0.008	0.002	−0.576	−0.155	−0.177	−0.039
Lower maintenance costs (I3)	−0.324	−0.119	0.384	0.097	−0.366	−0.139	0.292	0.073
Reduction of the environmental impact of construction (I4)	0.191	0.063	2.808	0.731	0.167	0.056	2.946	0.765
Creating a healthy living environment (I5)	0.94	0.324	−0.247	−0.064	0.968	0.34	−0.283	−0.074
Government incentives (I6)	−1.982	−0.617	−2.883 **	−0.683	−1.878	−0.598	−2.542 *	−0.610
Innovative attitude and improving professional image (I7)	−0.733	−0.149	−0.484	−0.078	−0.709	−0.148	−0.300	−0.049
Reduction in the costs of building materials (I8)	−0.395	−0.115	0.473	0.094	−0.384	−0.114	0.638	0.127
Individual-level variables:
Number of years of schooling (D5)	-	-	-	-	−0.337	−0.064	1.267	0.17
Marital status (Yes = 1, No = 0) (D16)	-	-	-	-	−0.155	−0.208	−1.311	−0.879 *
Religion (Muslim = 0, Jewish = 1)	-	-	-	-	0.295	0.476	−1.955	−5.884
Monthly income (Ref.: up to NIS 6000 in 2020)
Medium income (NIS 6001–18000)	-	-	-	-	0.919	1.259	-	-
High income (Over NIS 18001)		-	-	-	0.276	0.716		-
No. of observations		215		500		215		500
R2		0.151		0.219		0.156		0.235
Adjusted R2		0.075		0.18		0.053		0.19
F		1.975 *		5.616 **		1.515		5.252 **

^a Unstandardized regression coefficient; ^b t-statistic and its significance level; * indicates a 0.05 significance level; ** indicates a 0.01 significance level. Model 1: model without socio-demographic attributes; Model 2: model with socio-demographic attributes.

. The analysis links the size of the acceptable PP to respondents’ familiarity with the GB concept, their socio-demographic characteristics, and the incentives for purchasing a GB. The table consists of two models: Model 1 presents the degree of familiarity with the GB concept and incentives without considering the socio-demographic attributes, while Model 2 presents the same analysis considering the socio-demographic attributes. Variables, such as income, educational level, marital status, and religion, were considered in the early stages of the analysis, but as none of them was found statistically significant, these variables are not reported in either one of the models.

As shown in Table 5, for Model 1, only the item “When I purchase a new apartment, I will give priority to a green one” (Q5) was a statistically significant predictor of the PP (p < 0.05, b = 0.674, t = 2.458). The same result was obtained in Model 2.

4.6. Factor Analysis

To reduce the large number of correlated variables (see Appendix B) into a fewer number of orthogonal factors, we conducted a factor analysis. With regard to the variables representing familiarity with the GB concept (

Table 6. Factor analysis of the variables representing familiarity with the GB concept.

Familiarity with the GB Concept	Component Matrix a1		Rotated Component Matrix a2
	F1	F2	F1	F2
	Economic and Environmental Values	Societal Values	Economic and Environmental Values	Societal Values
GBs reduce environmental impact (Q2)	0.872	0.204−	0.866	0.229
GBs reduce economic expenses and increase energy savings (Q3)	0.848	−0.259	0.87	0.169
GBs help to uphold societal values (Q4)	0.611	0.68	0.221	0.887
When I purchase a new apartment, I will give priority to a green one (Q5)	0.823	−0.036	0.743	0.354
GBs have a capability of minimizing environmental impact (Q6)	0.796	−0.194	0.794	0.202
GBs have a capability of reducing costs and achieving energy savings (Q7)	0.862	−0.280	0.893	0.157
GBs have a capability of improving society (Q8)	0.597	0.681	0.208	0.882
Initial Eigenvalues	4.264	1.151
% of Variance	60.912	16.447
Cumulative %	60.912	77.359
Rotation Sums of Squared Loadings
Total			3.58	1.835
% of Variance			51.137	26.221
Cumulative %			51.137	77.359

Notes: Extraction method: principal component analysis; rotation method: Varimax with Kaiser normalization, Eigenvalues > 1, r > 0.6.^a1: a. 2 components extracted; ^a2: a. rotation converged in 3 iterations.

), the analysis revealed the following two main factors: “economic and environmental values” (F1), which had a strong positive correlation (r > 0.6) with the following variables: “GBs reduce environmental impact” (Q2), “GBs reduce economic expenses and increase energy savings” (Q3), “When I purchase a new apartment, I will give priority to a green one” (Q5), “GBs have a capability of minimizing environmental impact” (Q6), and “GBs have a capability of reducing costs and achieving energy savings” (Q7). Concurrently, “societal values” (F2) was found to strongly and positively correlate (r > 0.6) with “GBs help to uphold societal values” (Q4) and “GBs have a capability of improving society” (Q8). These two factors capture about 77% of the original variation in the variables, whereas F1 alone explains about 51% of the variation.

Factor analysis of the policy incentives affecting the PP size yielded only one as the principal component (F3). As shown in

Table 7. Factor analysis of policy incentives affecting the size of the PP for GBs.

Incentive	Component Matrix a
	General Motivation
Rise in energy prices (I1)	0.765
Rise in future real estate value (I2)	0.748
Lower maintenance costs (I3)	0.863
Reduction of the environmental impact of construction (I4)	0.85
Creating a healthy living environment (I5)	0.853
Government incentives (I6)	0.81
Initial eigenvalues	4.805
% of Variance	60.06
Cumulative %	60.06
Extraction sums of squared loadings
Total	4.805
% of Variance	60.06
Cumulative %	60.06

Notes: Extraction method: principal component analysis; rotation method: Varimax with Kaiser normalization, Eigenvalues > 1, r > 0.6. ^a 1 component extracted.

, this factor captures about 60% of the variation in the original variable and correlates strongly with “Rise in energy prices” (I1), “Rise in future real estate value” (I2), “Lower maintenance costs” (I3), “Reduction of the environmental impact of construction” (I4), “Creating a healthy living environment” (I5), and “Government incentives” (I6).

4.7. Regression Analysis (Phase 2)

In order to identify the factors affecting the PP size, we conducted another regression analysis, in which the dependent variable was the acceptable PP and the explanatory variables were the three principal components (F1–F3) that were extracted in the factor analysis (see Section 4.6) plus the following socio-demographic variables: educational level, marital status, religion, and income. The results of this analysis are reported in

Table 8. Factors affecting the PP size (%) that prospective homebuyers are willing to pay for GBs (method: multiple regression analysis; dependent variable: the acceptable PP size; the extracted factors are introduced as explanatory variables).

Variable	b a	t b	VIF
(Constant)	10.185	3.466 **
Factor 1: Economic and environmental values	1.747	2.382 *	2.295
Factor 2: Societal values	1.777	3.357 **	1.192
Factor 3: Policy incentives	−1.123	−1.450	2.528
Number of years of schooling	−0.122	−0.684	1.089
Married (yes = 1, no = 0)	0.108	0.084	1.111
Religion—Muslim (yes = 1, no = 0)	0.729	0.464	1.068
Monthly income (reference category: up to NIS 6000 in 2020)
Medium income (NIS 6001–18000)	1.476	1.114	1.442
High income (Over NIS 18001)	2.129	0.876	1.357
No. of observations	215
R2	0.08
Adjusted R2	0.04
F	2.000 *
SEE	6.719

^a Unstandardized regression coefficient; ^b t-statistic and its significance level; * indicates a 0.05 significance level; ** indicates a 0.01 significance level.

.

4.8. Hypotheses Testing

The results reported in Table 8 show that the factors F1 (“economic and environmental values”, b = 1.747, t = 2.382, p < 0.05) and F2 (“societal values”, b = 1.777, t = 3.357, p < 0.01) are positively and strongly correlated with the acceptable size of GBs’ PP. This indicates that familiarity and knowledge increase the WTP PP for GBs; therefore, H1 hypothesis was supported.

To test H2, we used descriptive statistics to identify the distribution of the variables and to investigate the potential homebuyers’ WTP for GBs. We also performed the t-test for independent groups to examine the mean differences between our study population and the general Jewish population as reported by Ofek et al. [24]. The results show that Arab homebuyers are willing to pay a PP of 10.56%, which is significantly higher (p < 0.01) than the 6.58% found in the general Jewish population. Therefore, H2 was rejected.

5. Discussion

In recent years, GBs have gained significant popularity globally due to their economic, environmental, and social benefits [16,17,19,20,23,27,30,48]. Yet, despite a rapid increase in the number of GBs in Israel, their adoption in the Arab sector remains very low.

This study is the first to investigate the PP that potential Israeli Arab homebuyers are willing to pay for GBs and the associated influencing factors. Conducted in two cities ̶ Acre and Nazareth, the study used a face-to-face questionnaire to assess the residents’ familiarity with GBs and their attitudes towards GB government incentives. Differences between the two cities were also explored. The results were compared with those found in the Jewish population in Israel, as reported by Ofek et al. [24]. The comparison revealed that despite lower familiarity with the GB concept, prospective Arab homebuyers are willing to pay an average PP of 10.56%, which surpasses the values previously revealed in the Jewish sector: 6.58% in Ofek et al. [24] and 9.25% in Ofek and Portnov [17].

In an attempt to explain the higher PP found among prospective Arab homebuyers, despite being less familiar with GBs, we interviewed several Israeli experts and researchers who specialize in the field of planning and construction in the Arab sector. One of the suggested explanations was that as most Arabs in Israel tend to live near their extended families and in the same settlements, which are usually densely populated, they might feel that they have fewer housing options compared to Jewish homebuyers. As a result, they constantly strive to improve their living and housing conditions in those settlements. For this reason, they may state a higher acceptable PP for what can also be considered as a status symbol. The difference in the PP size may also be attributed to the higher importance attached to family life and family housing in the Arabic community, in which the family house is considered a lifetime investment for future generations.

The differences in PP may also be attributed to the consumption patterns in the Arab society, known for its inclination to adopt new products and brands [64]. According to the interviewees, a prominent characteristic of a typical Arab consumer is to first purchase the product without fully engaging with its premium benefits. Some of the interviewees also claimed that, for cultural reasons, Israeli Arabs may state higher intentions to squander, which do not necessarily materialize.

6. Policy Implications

Two main insights were generated in our study. One is that Israeli Arabs have less knowledge about GBs, and the other is that despite their lower familiarity with GBs, they have a higher WTP for them than that of Israeli Jews. The latter unexpected finding clearly indicates that one size does not fit all and that there is a need to develop targeted GB policies that are better tailored to meet different needs, knowledge, and attitudes among different population sectors in the same country.

Yet, despite the lower familiarity with GBs found among prospective Arab homebuyers, there was still a positive correlation between their familiarity level and their WTP PP. This finding emphasizes the importance of implementing educational measures and initiating awareness campaigns—in schools and in the community—to provide the Arab public with factual and conceptual GB knowledge, that can consequently result in a higher GB uptake. Such measures should be supplemented with targeted financial incentives to motivate prospective Arab homebuyers to purchase GB apartments.

It should be noted that this study has several limitations, including its relatively small sample size and limited geographical coverage, which affect the generalizability of the results. In addition, the structured focus of the close-ended survey questions and the need to keep the face-to-face interview short also limit the information that can be obtained. Another limitation is that the influence of the age gradient and monthly income was not investigated in this study due to the limited sample. Evidently, consumers who are younger and/or have higher income may prioritize GBs. Therefore, follow up studies, using larger samples, are needed to further investigate such links.

In summary, to gain a more comprehensive understanding of the topic, future research should include larger samples, larger geographical coverage, and additional ethnic groups. Such a wide-range study may be conducted through an online survey. Furthermore, as the GB standard has just become mandatory in Israel for all new residential development, it would be interesting to investigate the actual attitudes towards GBs and their acceptance among Arabs in Israel.

7. Conclusions

This study examined the acceptance of GBs among Israeli Arabs, who constitute about 21% of the total population but differ from the Jewish sector in many characteristics. Study findings can contribute to better understanding of the Arab sector’s maturity to adopt GBs and better tailoring of intervention tools for increasing GBs’ uptake among potential homebuyers.

Many studies demonstrate the benefits of GBs and emphasize the importance of promoting consumers’ willingness to purchase sustainable housing. However, as things stand, there are significant differences between population sectors with respect to GBs’ adoption. One sector that demonstrates a relatively low implementation of GBs is the Israeli Arab sector. According to our results, despite their lower familiarity with the GB concept and benefits, prospective homebuyers in the Arab sector are willing to pay an average PP of 10.56% for a green apartment, which is higher than the 6.58–9.25% found in the Jewish sector by Ofek et al. [24] and by Ofek and Portnov [17]. We offer two possible explanations for this difference. One is that larger households and generally higher household crowding, which characterize the Arab sector, lead to a higher WTP PP for GBs that are perceived as offering improved living conditions. Another reason is that GBs are apparently viewed as a status symbol.

Similar to the findings of previous studies, for e.g., [16,19,23,24,25,27,48,50], we found that the acceptable PP size is influenced by the perspectives of potential homebuyers on GBs’ benefits, such as savings on maintenance and energy costs.

However, unlike the significant associations found in recent studies between the WTP PP for GBs and environmental knowledge and attitudes, for e.g., [21,30,36,54], and between the PP size and socio-demographic characteristics, for e.g., [23,36,48,50,57], our findings on the influence of these factors were less conclusive. Also, we did not find that GB purchasing decisions are significantly influenced by government incentives, as found in previous studies, for e.g., [29,30,31,54,57]. An apparent reason is that if the government provides higher incentives, individuals may be inclined to pay less, since direct monetary encouragement may negatively impact their motivation, as shown in [17].