The effects of information presentation on real estate market perceptions

Jin, Changha; Gallimore, Paul

doi:10.1080/09599916.2010.518404

Cited by 14 publications

(7 citation statements)

References 10 publications

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“…Scholars like Sah et al (2010) argue that framing effects significantly impact human decision-making within a property context. Jin and Gallimore (2010), Guo et al (2017), Tidwell and Gallimore (2014) found that the way information was presented in commercial real estate market reports changed people's perceptions and, thus, they confirmed the existence of framing effects in the quality of investment decisions. Additionally, Campitelli and Gobet (2010) assert that cognitive heuristics are psychological dimensions widely used to reduce the effort associated with the decision-making process (see Wood and Highhouse, 2014; Muradoglu and Harvey, 2012).…”

Section: Literature Reviewmentioning

confidence: 82%

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

Kinatta

Kaawaase

Munene

et al. 2021

JPIF

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PurposeThis study examines the relationship between investor cognitive bias, investor intuitive attributes and investment decision quality in commercial real estate in Uganda.Design/methodology/approachA cross-sectional research survey was used in this study, and data were collected from 200 investors of commercial real estate in Uganda using a structured questionnaire. Hierarchical regression analysis was used to test the hypotheses derived under this study.FindingsThe results indicate that investor cognitive bias and investor intuitive attributes are positive and significant determinants of investment decision quality in commercial real estate. In addition, the two components of Investor cognitive bias (framing variation and cognitive heuristics) are positive and significant determinants of investment decision quality, whereas mental accounting is a negative and significant determinant of investment decision quality. For investor intuitive attributes, confidence degree and loss aversion are positive and significant determinants of investment decision quality, whereas herding behavior is a negative and significant determinant of investment decision quality in commercial real estate in Uganda.Practical implicationsFor practitioners in commercial real estate sector should emphasize independent evaluation of investment opportunities (framing variation), simplify information regarding investments (Cognitive heuristics), believe in own abilities (Confidence degree), be risk averse (loss aversion) and avoid making decisions based on subjective visual mind (mental accounting) and group think/herding in order to make quality investment decisions. For policymakers, the study has illuminated factors such as provision of reliable information that ought to be taken into account when promulgating policies for regulation of the commercial real estate sector. This will help investors to come up with investment decisions which are plausible.Originality/valueFew studies have focused on investor cognitive bias and investor intuitive attributes on investment decision quality in commercial real estate. This study is the first to examine the relationship, especially in the commercial real estate sector in a developing country like Uganda.

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Section: Literature Reviewmentioning

confidence: 82%

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

Kinatta

Kaawaase

Munene

et al. 2021

JPIF

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“…However, the valuation decision making is not exclusively dedicated to anchoring and includes other heuristics such as framing bias (e.g. Jin and Gallimore, 2010). The ground leasehold value and ground rent relationship has not been studied in a behavioural sense.…”

Section: The Behavioural Property Literaturementioning

confidence: 99%

The response to freehold growth information when estimating ground leasehold value

Pope

Squires

Young

2022

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PurposeThis paper is concerned with behavioural responses to reviewed ground rents in New Zealand. The focus is on how freehold growth information is interpreted when considering reviewed ground rents on ground leasehold value.Design/methodology/approachSemi-structured interviews were conducted with ground leaseholders to inform the design of a controlled experiment. The interviews revealed that (a) purchasers tended to directly compare freeholds to ground leaseholds and (b) used rudimentary valuation methods. In the experiment, 40 property investors were requested to estimate the ground leasehold value close to the ground rent review time. Thereafter, 20 of the investors reassessed their ground leasehold value estimate using a projection of the future ground rent and a statement as to freehold growth (treatment). The control group of the remaining 20 investors received the estimate of the future ground rent only.FindingsThe tendency for higher treatment group valuations indicated the growth information was too available. Comparing ground leaseholds directly to freeholds, rather than thinking about the cost implications, is attributed to a manifestation of the availability heuristic.Research limitations/implicationsThe study involves a typical ground lease arrangement (as verified by experts) in the New Zealand market where there are few protections for ground leaseholders. These findings justify prohibiting new ground leases where the ground rents are set by reference to freehold land value.Originality/valueThis paper extends behavioural theory (availability heuristic) to explaining human interaction with ground leaseholds.

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“…On intrapersonal judgement bias relating to information ambiguity, Bellman and Öhman (2016) indicate that valuers may spend considerable time abstracting marketrelated information. Kucharska-Stasiak (2013) and Jin and Gallimore (2010) indicate that different perceptions of information quality may trigger different informationprocessing strategies. Gallimore (1994) adds that in evaluating and choosing comparables, valuers face complex circumstances when assessing considerable amounts of information.…”

Section: Introductionmentioning

confidence: 99%

Complexity in valuation practice: an inquiry into valuers’ perceptions of task complexity in the Dutch real estate market

Klamer

Gruis

2018

Journal of Property Research

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The aim of this paper is to examine valuer judgement behaviour, by exploring the manifestation of task complexity in Dutch commercial valuation practice. For this purpose, we adopted a grounded theory approach and undertook 18 in-depth interviews with senior valuation professionals across the Netherlands. Our findings indicate a strong presence of situational task complexity in commercial valuation practice, as professionals operating in large valuation teams perceive different elements of task complexity throughout commercial valuation practice in comparison to peers working in small valuation teams or self-employed valuers. Further, coping strategies used to deal with task complexity vary substantially by type of valuer as well. From our data, we deducted three types of task environment constructs in which valuers operate, which basically represent the various levels of professional standards required by clients as well as organisational settings composed to meet client standards. As such, we found that task environment settings strongly coincide with perceptions of task complexity. The presence of situational task complexity in commercial real estate valuation practice points to the need for customisation of professional valuer's development programs to facilitate valuers to deal with task complexity in different stages of valuation practice and hence contribute to advancing valuer judgement skills.

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The effects of information presentation on real estate market perceptions

Cited by 14 publications

References 10 publications

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

The response to freehold growth information when estimating ground leasehold value

Complexity in valuation practice: an inquiry into valuers’ perceptions of task complexity in the Dutch real estate market

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