Measuring unobservable factors in residential developments: a structural equation approach
2016 (English)In: Journal of European Real Estate Research, ISSN 1753-9269, E-ISSN 1753-9277, Vol. 9, 250-272 p., JERER-06-2016-0025Article in journal (Refereed) Published
The purpose of this paper is to investigate how to measure the effect of unobservable factors on residential choice behaviour in an attempt to advance the understanding of how to perform advanced market analysis. This research is important to residential developers, as the diversity of preferences is increasingly driven by lifestyle-based households and affluent households.
Information about the pros and cons of renting an apartment in an ongoing residential development project in Stockholm came from interviews using the laddering technique. Qualitative data were subsequently analysed using exploratory and confirmatory factor analysis to confirm which factors had the highest effect on an overall assessment of living in the development and a value-for-money conclusion.
Among the potentially important factors identified, respondents who became residents perceived the development to be more noise-free than those who did not when stating the overall value of living in the development and making a value-for-money conclusion. The perception of noise differed between the two groups, meaning that those who did not become residents believed the development to be more exposed to noise. The standard of the apartment was the second most influential factor when stating the overall value of living in the development and making a value-for-money conclusion. The belief of being able to relax in the home environment had no significant effect on overall value for either group.
The results show that confirmatory factor analysis can be used in measuring the effect of unobservable factors in residential choice behaviour. The methodology presented may advise developers, architects or planners in evaluating those attributes that create value-for-money to improve, for example, overall design solutions in urban development projects.
Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2016. Vol. 9, 250-272 p., JERER-06-2016-0025
Customer perceived value; Laddering technique; Market analysis; Residential choice behaviour; Structural equation modelling
Research subject Real Estate and Construction Management
IdentifiersURN: urn:nbn:se:kth:diva-198603DOI: 10.1108/JERER-12-2015-0046ScopusID: 2-s2.0-84994218430OAI: oai:DiVA.org:kth-198603DiVA: diva2:1057565
QC 201701162016-12-192016-12-192017-01-16Bibliographically approved