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

Simplifying choice as a departure from NCE: Speare, Goldstein and Frey, 1975

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4.4 Simplifying choice as a departure from NCE: Speare, Goldstein and Frey, 1975

Within a bounded rationality perspective the search process itself does have a significant role in influencing human decision-making (the three p’s: processes, preferences and prospects). This may be at odds to other views of housing decision-making, migration and household mobility. Dielemen (2001) for example reviews the literature on household decision-making and residential mobility, but excludes a discussion on the search for information and housing opportunities, and how households interact with those housing opportunities.

Speare, Goldstein and Frey’s (1975) model is the first identified here to consider an expressly behavioural model of housing search, building on the work of Herbert Simon:

“This work grows out of a conception of human decision making that is perhaps best represented in the work of Simon (1957). Simon views the individual decision maker as limited in the capacity to formulate and solve problems and to acquire and retain information. To cope with these problems the individual constructs a simplified model of the situation and acts rationally with respect to that model. Simon suggests that in this simplified model only a subset of the alternatives are perceived and payoffs are evaluated only as satisfactory or unsatisfactory. No action is taken if the current state is judged to be satisfactory. If it is unsatisfactory a search is made for outcomes that are satisfactory and the search is terminated when a satisfactory alternative is found (Simon, 1957:198-201)” (Speare, Goldstein and Frey, 1975, PP.172-173)

Fig. 2 is a combination of three models outlined by Speare, Goldstein and Frey (1975). Following Brown and Moore (1970) they separate the housing search process into three stages. They do also include a single mobility process model (see p.191), but this removes much of the detail of the decision making process. The three stages are: the development of a desire to consider moving, the selection of an individual location, the decision to move or to stay. Citing Simon, the model can be seen to be procedurally rational, in that the households determines a course of action, which may be suboptimal and then acts rationally with regard to it.

Fig. 4.4: An adaptation of three models of mobility: Speare, Goldstein and Frey, 1975

Source: Adapted from Speare, Goldstein and Frey (1975, PPs 177, 180 and 182)

This model explores satisfaction thresholds, drawing on Wolpert’s behavioural geography work (1965, 66), rejecting a utility maximization approach. In voluntary moves, dissatisfaction must rise above a person’s threshold, in essence households satisfice in their existing dwellings until pushed beyond their stress threshold. Information is also viewed as constrained to awareness of alternatives too, rejecting the full market information outlined by mainstream models, such as that of Tu and Goldfinch (1996).

Search for information about opportunities and the evaluative stage are based on limits (primarily awareness spaces). The decision whether to move is then a (modified) cost-benefit calculation. The limited explanation of the roles of intermediaries in the housing market and wider socio-cultural trends means their work misses key influences on the decision making process and on outcomes.

Speare, Goldstein and Frey (1975) develop their schematic diagram into a mathematical model, supporting the role of mathematical models within BE approaches. In order to expand on the conceptual framework of individual mobility into aggregate decision making. Speare, Goldstein and Frey (1975) recognise the necessity to simplify behaviour, including making the decision to consider moving and to move are expressed as linear functions.

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