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Predicting consumer response to new housing : a stated choice experiment

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  • Design
  • Political Science


PREDICTING CONSUMER RESPONSE TO NEW HOUSING: A STATED CHOICE EXPERIMENT Eric Molin, Harmen Oppewal and Harry Timmermans ABSTRACT This paper discusses problems typical of eliciting housing preference. It will be argued that stated preference and choice models are potentially powerful in eliciting consumer housing preferences. This approach is illustrated in an example of new housing construction in Meerhoven. The design of the stated choice experiment is outlined and the estimated part-worth utilities of the attributes are presented. Furthermore, choices for houses in low- and high-density environments are predicted and it is examined how much more households are willing to pay for low-density housing. 1 Introduction Over the past decades, the housing market in many industrialized countries has moved away from a heavily government-regulated industry to an increasingly market-orientated industry. This trend reflects a retreat of government in providing social facilities. Other non-profit or profit organizations in the market place have been given greater autonomy and have been empowered to make their own decisions. Consequently, housing associations, for example, have felt an increased need to build houses that reflect the needs and preferences of their target market. It has led to an upsurge of market research activities to predict consumer response to new housing products. Newly constructed houses should satisfy the needs and preferences of households for which these houses are intended. To the extent that housing associations are successful in attaining these goals, risks are reduced. From an academic point of view, this increased market orientation raises the question how housing preferences can be measured. Realizing that no method is necessarily error-free, it seems critical to identify the specific assumptions underlying any particular method and assess to what extent these assumptions apply to any specific problem. The purpose of the present

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