Towards infusing institutions and agency into house price analysis

Abstract

Summary. The article puts forward the argument that housing market and property value models currently lack an adequate methodological basis. In order to improve the conceptual framework of the economic analysis of housing market behaviour, necessary institutional parameters need to be included. This, however, causes further difficulties, because some of the institutions are predominantly informal and operate at the cognitive level of market behaviour. While the problem of overstrict assumptions at the aggregate level has been tackled successfully, the next fundamental problem to solve is how to disaggregate feasibly the demand-side analysis. One possibility for this is to generate preference profiles of actors with different institutional backgrounds, using a multicriteria decision technique such as the analytical hierarchy process (AHP)