1. Understanding Consumers’ Housing Preferences and Aspiration: A comparative review of two research approaches and application in urban China research Yizhao Yang, Ph.D. Assistant Professor Department of Planning, Public Policy and Management University of Oregon

2. Housing as a multi-dimensional and multi- scale concept Housing as a bundle of service House (shelter) Social Interaction Service Status Housing as a spatial hierarchy Housing scheme (Lee, 1968) House-settlement system (Rapoport, 1977) Housing unit, micro-neighborhood, macro- neighborhood…(Marans and Rogers, 1975)

3. Understanding Consumers’ Housing Preferences and Aspiration Two Approaches Hedonic Study Satisfaction Study

4. Hedonic Housing Study Market prices reflect what consumers value. Assumptions Full market information Free competition No costs involved in moving and relocation Common preference for housing attributes and characteristics.

5. Hedonic Housing Study Conceptual understanding Lack of theoretical study about what housing attributes matter Based on researchers’ understanding of a housing market Generally considered important factors Unit characteristics (e.g., size, number of bedrooms, number of bathrooms, etc) Public services (e.g., school quality) Locational characteristics Site characteristics (street layout, e.g., cul-de-sac) Spatial relationship (e.g., proximity to other urban land uses or elements)

6. Hedonic Housing Study Application of hedonic study in the U.S.: Data Housing price information based on market transaction (e.g., Multiple Listing Service) Housing price information based on self assessment (e.g., Census data) Property assessment information for tax purpose (e.g., government tax assessor’s office) Functional form Hedonic regression (often take a linear form).  Housing price = f (housing attributes) Omission of variables

7. Hedonic Housing Study Limitation: Mostly focused on single family houses (rental housing is understudied) Only for what are available in the market, Impossible to infer what is not available No consideration given to differential preferences and values that consumers have

8. Example: Sirmans and Macpherson’s study (2003) analyzed 28,828 single-family home sales during two periods (1996-1999 and 2000-2003) in New Jersey-Maryland region

9. Housing Satisfaction Study Consumers’ real experience and subjective assessment as a way to gauge housing performance Assumptions Consistency between subjective perception and objective conditions Inter-person evaluation comparability

10. Housing Satisfaction Study Conceptual understanding Satisfaction is the “gap” between what consumers aspire to and what they experience in reality (see Galster and Hesser 1981) Housing satisfaction is a composite measure of residents’ assessment of a number of housing attributes Evaluation of a particular environmental attribute depends on individual perception in relation to internal standards (Marans and Rogers 1975) Characteristics of the evaluator Global assessment of a housing, housing satisfaction Assessment or perception of individual housing attributes Objective conditions of a housing attribute. Assessment or perception of a particular housing attribute Characteristics of the evaluator

11. Housing Satisfaction Study Generally considered important factors Unit characteristics (objective adequacy, self assessment) Public services (e.g., school quality, police protection) Locational characteristics Site characteristics (street layout, e.g., cul-de-sac) Spatial relationship (e.g., proximity to other urban land uses or elements) Social aspect of the housing environment (crime, neighborliness, etc) Consumer characteristics (socioeconomic status, position in life cycle, etc)

12. Housing Satisfaction Study Application of housing satisfaction study Data: Self conducted surveys National survey (e.g., American Housing Survey) Functional form Linear regression (dependant variable takes the form of a global assessment of one’s housing or neighborhood) Omission of variables

13. Example: A study of neighborhood satisfaction based on about 39,000 cases reported in the 2002 American Housing Survey (including 13 Metropolitan Statistical Areas).

14. Hedonic study vs. Satisfaction study Individual-level analysis Decompose a composite (global) measure of housing quality (housing price or housing satisfaction) Infer the relative value of housing attributes held by consumers (implicit unit price or rating score impacts) Only work for what is available in the market Both require strong assumptions Both involve methodological issues Hedonic study provides easier interpretation Satisfaction study provides broader consideration of housing environments

15. Application in Urban China Research Hedonic study Theoretic assumptions not met Data availability Satisfaction study Conceptual understanding (what matters in Chinese society) Survey design

16. Thank You