A Typology of Housing Search Behaviour in the Owner-Occupier Sector

Mainstream economics has persistently failed to predict housing market outcomes, and with a growing body of evidence to suggest that its foundational tenets are unrealistic, applied researchers are showing a renewed interest in the microstructures of housing markets and behavioural economics. The process of searching for and purchasing a dwelling to live in is one of the most complex consumption decisions a household will make. Yet many households undertake it successfully. It is intuitively and theoretically clear that households are likely to have varied experiences of the search process, yet there is a dearth of evidence of their actual behaviours, or the variations between different types of behaviours. This research is a response to this substantial gap in knowledge: it aims to describe the variation in search behaviours and to construct a typology by clustering similar search behaviours together. A conceptual model is created to distinguish the key variables across different stages of the search process that potentially exhibit variation between households. A bespoke postal survey was designed to gather households’ perceptions of their behaviour in the housing market in Sheffield in 2010. From this it is evident that households do exhibit very different behaviours and do not conform to the standards of homo economicus. However, there is a spectrum of behaviour from households that exhibit some similarity to utility maximisers through to satisficers. Using the survey responses, in an original application of a combined categorical principal components analysis and cluster analysis method, four distinct clusters are evident. The clusters: relational satisficers, financial responders, discontents and petite, lifestyle decisives exhibit different behaviours in the housing market. This typology has potential to be used in modelling of housing markets and in supporting the creation of nuanced policies designed for specific behaviours and outcomes