Determinants of Urban Housing Choice in Debre Berhan Town, North Shewa, Amhara Region, Ethiopia

doi:10.7176/jesd/12-19-03

Abstract

In developing countries, in the midst of important factors influencing urban housing choice, demographic, socio-economic and institutional factors are the most critical. This study aims to investigate the determinants of housing choice in Debre Berhan town, Amhara Regional State, Ethiopia. Qualitative and quantitative data were used. Both primary and secondary data were used to carry out the study. A multistage sampling procedure was used and a total of 395 household heads was selected by a simple random sampling method from three home ownership alternatives of four Kebeles. Ordinary least square estimation technique was used to estimate the hedonic price of the house and multinomial logit model was used to estimate the determinants of housing choice in the study area. The result of the study indicated that age of household head, sex of the household head, educational level, the price of the housing, years of residence, income of the head and access to credit were determinants of urban housing choice in the study area. While, near amenities, floor material, age of the house and the numbers of the bedroom were significantly affected housing price in Debre Berhan town. The study recommends that government and stakeholders should support households to construct and purchase house. Keywords: Housing Choice; Hedonic price and Multinomial Logit DOI: 10.7176/JESD/12-19-03 Publication date: October 31 st 2021

Highlights

Housing is basic human needs, which have evolved from simple shelters to modern housing units
There are different socio-economic and demographic factors which affect household housing choices, such as demographic changes, income level, the availability and location of housing units are some of the factors which prevail all over the world (Wildish,2015)
The data is collected from different sources have been edited, interpret and analysis by using descriptive analysis and econometric models; ordinary least square used to estimate the determinants of housing price and multinomial logit model to identify the determinants of urban housing choice after the completion of the data collection

Summary

Introduction

Housing is basic human needs, which have evolved from simple shelters to modern housing units. It has great importance to households i n both developed and developing economies. It is the largest fixed capital investment and acts as a focus of economic activity, a symbol of achievement, social acceptance and an element of urban growth (Malpezzi, 2012). In many developing countries around 40% (two third) urban residents are living in rented housing units. According to Malpezzi I (2014), majority of countries have some form of price control on some or all of their rental housing stock. There are different socio-economic and demographic factors which affect household housing choices, such as demographic changes, income level, the availability and location of housing units are some of the factors which prevail all over the world (Wildish,2015)

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