Trading Spaces

by | May 17, 2017 | Economics

Indoor Environmental Quality, or IEQ, refers to “the quality of a building’s environment in relation to the health and well-being of those who occupy space within it.”[1] We have developed a method to monetizing the intangible benefits to employees from investing in the improved indoor environmental quality of a work space.

How do you measure the impact of improved IEQ?

Photo of Impact Infrastructure’s new office as of March 1, 2017

IEQ can be affected by many interior design components including lighting, air quality, temperature, views, and more. Specifically, in Autocase, the following LEED IEQ credits are available for study:

  • Daylighting
  • Interior Lighting
  • Interior mural wallpaper
  • Low Emitting Materials
  • Quality Views
  • Thermal Comfort
  • Construction Indoor Air Quality Management Plan (CIAQMP)

Within these six IEQ credits, there are many features that can be installed as part of a building design to affect IEQ. These include, but are not limited to:

  • Individual lighting controls
  • Individual temperature controls
  • Increased ventilation
  • Skylights
  • Installations using low emitting materials (such as low emitting paints)
  • Garden space that is visible to worker’s indoors
  • Indoor vegetation (such as green walls)

As previously mentioned, the main goal is to explain how to measure the impact of each of these investments on IEQ. Specifically, we want to measure these impacts in dollar values, so as to have an “apples to apples” comparison to other project designs and metrics. So, how do we put a dollar value on a design component aimed at improving the health and wellbeing of those who occupy a space?

Firstly, we categorize the impact into three broad categories:

  • Productivity improvements
  • Employee’s reduced absenteeism due to improved health
  • Societal health costs

IEQ plays a large role in the productivity and health of building occupants. For example, providing increased ventilation, reducing pollution sources, improving light quality, improving thermal comfort, providing quality views and daylighting can all lead to employees that work harder when at work, employees who are at work more often, and healthier workers (leading to lower societal healthcare related costs).

Our research has revealed that many peer-reviewed analyses and meta-analyses have linked changes in productivity, absenteeism and healthcare costs to improved IEQ. Specifically, for each of the six IEQ credits analyzed in LEED, the following relationships have been identified to each of the three impacts.

Indoor Environmental Quality Investment Productivity Absenteeism Societal Healthcare Costs
Thermal Comfort x x
Low Emitting Materials x x
Quality Views x x
Interior Lighting x
Daylighting x

Employee productivity can be effected positively by improving thermal comfort through individual comfort controls,[1] as well as increasing air quality by removing source pollutants,[2] and providing interior lighting controls for individual occupants in an office building by providing adequate and glare-free lighting.[3] Giving building occupants access to daylight and the use of full-spectrum lighting in office buildings has also been shown to increase occupant productivity through increased levels of mental performance and improvements in sleep quality.[4]

As for employee health, some building materials release chemicals during and after installation, compromising a building’s indoor air quality, occasionally leading to increase in sick days.[5] Introducing more greenery to employees’ views can also decrease the amount of sick days taken by employees.[6] Temperature controls for individuals in office buildings have been shown to decrease health issues by providing personalized indoor temperature, which positively affected societal health costs.[7]

After it was determined that these relationships exist for various building designs and the corresponding impacts on workers’ productivity and wellbeing, the next step was quantifying the benefit of these impacts.

For productivity, the benefits were provided as a percentage increase in productivity from a base case productivity-level without the IEQ improvement. Based on this metric provided by the research, we took the following steps in order to quantify the benefits from investments in IEQ:

  • Calculate the LEED credit equivalent achieved based on the design parameters provided as part of the inputs requested in Autocase (varies by credit).
  • Calculate the productivity increase per employee using the mean percentage increase per credit (0.125%) and the number of credits achieved.[8]
  • Multiply the productivity factor by average annual wage of an employee in that buildings by the total number of employees in the building.

Calculating the impact of reduced absenteeism from improved IEQ, in dollar-values, uses a similar methodology. The steps are outlined below:

  • Determine, from the literature, the total number of working days lost (as a percentage of total working days – assumed to be 250 days) due to lack of IEQ investments (varies by credit).
  • Determine the average value of an employees’ work-day by multiplying the average daily wage of an employee in that buildings by the total number of employees in the building.
  • Multiply the average value of an employee’s work-day by the increased number of days a work spends in the office.

Specifically, for quality views, the number of absent or sick days in the “base case” (where no IEQ investments were made into quality views) compared to a design case (where improvements into quality views were made) had a reduction factor of 0.16%.[9]

Also, specifically for Low Emitting Materials, to determine absent or sick days, we focused on material emissions effects on asthma and allergy sufferers. The literature showed that low emitting materials had a sick day reduction factor of 0.25% for asthma and allergy sufferers. We then determined the average number of employees in an office that suffer from asthma and allergies, which was approximately 23.4% for allergies and 6.5% for asthma.[10]

Finally, for societal healthcare costs, which currently only pertain to thermal comfort, the following steps were taken:[11]

  • Determine the number of individual and group thermal comfort controls
  • Determine the percentage of days per year that require cooling through building air conditioning, and equivalently the percent of days per year that requiring building heating. (It was assumed that a building would require cooling if temperature rose above 66.2 degrees Fahrenheit, and heating if below 60.8 degrees Fahrenheit.)
  • Calculate based on the literature, the change in symptom prevalence rates in the summer and winter (separately) by multiplying the temperature change in summer/winter by the prevalence rate of symptoms and by the percent cooling/heating degree days. The total change in symptoms prevalence rate is equal to the change in prevalence rate in the summer plus the change in prevalence rate in the winter.
  • The total change in symptoms for individual and group occupancy spaces is equal to the change in prevalence rate multiplied by the number of individual occupant spaces with temperature controls plus the change in prevalence rates multiplied by the total group occupant employees.
  • To calculate the total value of change in symptoms, multiply the total change in symptoms by the value (in dollars) of each symptom as provided by the literature reviewed.[12]
  • Because these values change over the years, must also apply the medical cost growth forecasted for each year to the annual values found in step 5.

While there is much research in this area that is ongoing, we are constantly updating our sources and methodologies, and therefore, in order to be as transparent as possible, we have provided a rating system for the literature relied upon for each LEED credit and impact.

Indoor Environmental Quality Investment Productivity Absenteeism Societal Healthcare Costs
Thermal Comfort High Good
Low Emitting Materials Acceptable Good
Quality Views Good High
Interior Lighting Good
Daylighting Good

While our rating system is provided to be as transparent as possible, we will not use any research that does not meet our minimum threshold of quality, to ensure that we use peer-reviewed, unbiased sources. The rating system evaluates the sources based on the following:

  • Purpose
  • Authority
  • Accuracy
  • Currency
  • Coverage

Based on these five attributes, the source will be given a rating of either “High”, “Good”, or “Acceptable.” For more information on this rating system, please see our blog post with the complete details.

[1] Lawrence Berkeley Lab, 2016

[2] Wargocki et. al., 2000, Wargocki et. al., 2002, Lawrence Berkeley Laboratory, 2016

[3] Loftness et al, 2003

[4] Edwards & Torcellini, 2002

[5] Green Guide for Health Care, 2007, Mitchell & Bates, 2011, Lawrence Berkeley Laboratory, 2016

[6] Elzeyadi, 2011, Heschong, 2003, Lohr et. al., 1996

[7] Jaakkola et al., 1989, Lawrence Berkeley National Laboratory, 2016

[8] Kats, G. (2003). The Costs and Financial Benefits of Green Buildings. USGBC.

[9] Elzeyadi, I. M. (2011). Daylighting-bias and biophilia: Quantifying the impact of daylighting on occupants’ health.

[10] Barnett, S. B. L., & Nurmagambetov, T. A. (2011). Costs of asthma in the United States: 2002-2007. Journal of Allergy and Clinical Immunology, 127(1), 145-152.

Guide for Green Health Care. (2007). Low emitting materials technical brief.

IAQ Science. (2016). VOCs and allergy, asthma, and related respiratory symptoms. Lawrence Berkeley National Laboratory.

Mitchell, R. J., & Bates, P. (2011). Measuring health-related productivity loss. Population health management, 14(2), 93-98.

[11] Lawrence Berkeley National Laboratory (2016). Better control of indoor temperatures.

Jaakkola, J. J., Heinonen, O.P., Seppanen, O. (1989). Sick building syndrome, sensation of dryness and thermal comfort in relation to room temperature in an office building: Need for individual control of temperature. Environment International. 15, 163-168.

Hoyt, T., Lee, K. H, Zhang, H., Arens, E., & Webster, T. (2009). Energy savings from extended air temperature setpoints and reductions in room air mixing. International Conference on Environmental Ergonomics.

[12] National Service Center for Environmental Publications. (1991). Cost of Illness Handbook. Environmental Protection Agency.



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