Understanding housing market choices
September 9, 2011 Leave a comment
Occasionally I divert myself from tweeting and blogging long enough to write something a bit more academic, usually about housing. I have a paper in the current issue of the journal Housing, Theory and Society. It looks at Uncertainty, expectations and behavioural aspects of housing market choices. The paper is coauthored with my good friend Ken Gibb from Glasgow University.
Here’s the abstract:
Housing is a complex commodity and housing market choices carry with them substantial economic and social consequences for the households making them. Housing market decisions are complex, uncertain and involve expectations-formation. This paper argues that the standard economic theory of decision-making under uncertainty – expected utility theory – is particularly ill-suited as the basis for understanding such complexity. The paper then explores alternative avenues for potential development, reviewing the key characteristics of owner-occupied housing markets and housing search, and examining how the resources of institutional and behavioural economics could be used to inform our understanding of the residential mobility process. The paper concludes by outlining an agenda for empirical research.
If you have access to a subscription then you can read the full paper here.
The paper is part of a focus issue with several commentaries. We also get to reply to the commentators. You can find this here (subscription required).