Consumer Preferences in Housing Market Analysis: An Application of Multidimensional Scaling Techniques

Abstract

The value of single–family housing is a function of demographic, economic and psychographic variables. Much work has been done on the objectively measurable criteria, but virtually none on the subjective, perceptual criteria. This study uses consumer‐supplied similarity measures of housing alternatives to develop a multidimensional perceptual “map” of the way consumers view housing choices. The dimensions of this perceptual space represent the evaluative criteria utilized, consciously or unconsciously, during the housing evaluation process. The analysis, although exploratory in nature, suggests that all perceptually defined market segments use the same evaluative construct; that market segments may be defined in terms of differences in the relative importance of each criterion; that market segments do not necessarily correspond to simple demographic measures; and that the major evaluative criteria in the perceptual process generally agree with those found in the literature based on objective measurements.