ESTIMATING THE PROBABILITY OF A FIRST, SECOND OR THIRD HOUSE BUYER PURCHASING A PARTICULAR RESIDENTIAL PROPERTY

Abstract: The paper is based on research that seeks to estimate the probabilities that the purchaser of a given property will have certain characteristics. The use of ordered probit models for this use is explained. Ordered probit models are used with the number of houses previously owned as the dependent variable. This is modeled with an array of independent variables that are property attributes such as building area, condition and location. The aim is to establish a marketing tool to establish the probabilities of particular buyer groups, buying a specific property. The basis of this research is a survey of some 3000 house purchasers who purchased detached and semi detached houses in Adelaide over the period June 1994 to March 1997. Results are presented as a spreadsheet where particular property attributes are entered and the probability of specific buyer groups are calculated from the ordered probit models. Estimating the Probability of a First, Second or Third House Buyer Purchasing a Particular Residential Property – Rossini Page