Capturing Heterogeneity in Preference for a Real Estate Offering Using a Hierarchical Bayesian Regression Model

Abstract

Consumers have dissimilar preferences. Real estate researchers have acknowledged that needs and wants differ among consumers. Creation of different real estate offerings with different attributes and the creation of various communication messages are consequences of this heterogeneity. Our study helps both the real estate developer and the real estate marketer (or broker). We capture consumer heterogeneity using the hierarchical Bayesian regression model. We explain how Bayesian regression can be used to study both observed and unobserved consumer heterogeneity in preference. We also examine heterogeneity at the individual level. We study the elite Indian real estate consumers' preferences for the internal and external features of an apartment.