Applying Insights from Behavioural Economics to Explain the Low Uptake of Green Construction : A Literature Review

The adoption of green construction is not widespread, despite the plethora of policies that have been instituted in various countries to motivate building construction stakeholders to embrace it. The decision-making process has been identified as the single point of failure. However, there has not been an in-depth examination of how decision-making influences green construction adoption. Hence, this paper aims to contribute to the conversation in the field by explaining the low uptake of green construction from a behavioural economics perspective. It finds that: (1) it is at the individual level of decision-making that building construction stakeholders are reluctant to adopt green construction; (2) the cooperative coordination and present-future trade-off of costs and benefits problems occur in the decision-making process; (3) the confluence of five factors – social norms, personal dilemma, trust in others’ action, loss aversion, and self-interest – could be impacting the decision-making process and causing these two problems to occur; and (4) the suboptimal green construction adoption is a rational behaviour In terms of theoretical contribution, this paper establishes initial propositions about the behavioural issues underlying the low uptake of green construction and proposes the Decision-making Logic Hypothesis. However, further empirical work is needed to corroborate, modify, or rebut the propositions and conclusion. For policymakers, the propositions could serve as a support framework for rethinking the analysis and design of mechanisms for promoting the adoption of green construction and other similar practices in the construction industry