A microstructural analysis of housing renovation decisions in Brisbane, Australia

Abstract

Housing studies have rarely discussed the emotional aspect of the householder's decision to renovate his house. It is proposed in this paper that, besides the fundamental factors considered in the previous literature, the social and psychological factors derived from sociology and behavioural economics may enrich the study of renovation decisions. Based on the primary data of residents in Brisbane, the empirical results demonstrate that a householder's renovation decision is related both to fundamental factors and to psychological factors. For example, a homeowner's likelihood of undertaking renovations is highly related to his perception of his own performance in undertaking renovation.

Keywords:

• housing renovation
• decision-making
• psychological factors
• Australia

Acknowledgements

I am grateful to Dr Peter E. Earl and anonymous referees for helpful comments on the earlier version of this paper.

Notes

1. The purpose of factor analysis is to reduce the complexity of the data by extracting a subset of underlying dimensions called ‘factors’ determined by the correlation between the original variables. The details of the factor analysis done in this study are available upon request to the author.

2. The p-values of Pearson correlation coefficients between renovator's ‘number of renovation experience’ and ‘perceived self-performance in renovation’, ‘trust in contractors’, ‘social dependence’, ‘perceived ease of renovation’ are 0.254, 0.757, 0.345, 0.571, respectively.

3. There were 11 renovators who skipped this section of questions, so that the number of renovators reported in Table 2 is 269.

4. Some may argue that the word ‘adequate’ might not be sufficient enough to represent respondents’ satisficing choice, and the constrained format of the survey may to some extent suggest respondents pick the option that is ‘adequate’ to them. Please note that the author is well aware of the limitation of this section of the survey and thus presents only the descriptive contents rather than further empirical analyses on this issue.