Social Influence and Household Decision-Making: A Behavioural Analysis of Housing Demand

Michelle Baddeley

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Housing markets are subject to many interrelated sources of instability on both a microeconomic and macroeconomic scale. Housing decisions of different individuals will be interdependent, generating non-linearities, discontinuities and feedback effects. This paper focuses in on some behavioural factors that contribute to complexity in housing demand. In particular, the impact of herding and social influence is captured using a model incorporating the impact of social information on willingness to pay. This model is tested in an experimental context and this experimental evidence confirms first, that social information has a statistically significant impact and, second, this impact is determined by a person’s individual characteristics including gender and personality traits.

Keywords: Housing markets; herding; social influence; behavioural economics (search for similar items in EconPapers)
JEL-codes: D70 D83 D85 R21 (search for similar items in EconPapers)
Date: 2011-01-31
New Economics Papers: this item is included in nep-exp, nep-hme, nep-net and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1120

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