In search of the optimal:
satisficing and housing search
models
Presentation to HSA Conference 2015
[email protected]
@RichardJDunning
Housing policy & behavioural
economics
• New Labour (e.g. Halpern) to Conservatives (Control Shift), the
coalition & the Behavioural Insights Team (Jones et al, 2010;
Ferrari et al., 2011 Dolan et al, 2012; Leggett, 2014)
• New Homes Bonus (Dunning et al., 2014)
• financial calculus, rational operators and organisational
decision making
• Unclear impact, limited conceptualisation of problem or
mechanism for change
• Financial Payments to Developers (DCLG, 2014)
• Rational actors, financialising emotions, competitive
planning opposition
• Unclear impact, miscomprehension of motivations,
behaviour
OBE and NBE
• Bifurcation or continuum – Old BE and New BE (Watkins &
McMaster, 2011)
Old BE
• Herbert Simon, procedural rationality, old institutionalism, social
constructionism
• “the concept of “economic man” (and I might add his brother
“administrative man”) is in need of fairly drastic revision” (Simon,
1955, P.99).
New BE
• Mainstream/Neoclassical economics, utility maximisers with
constraints, information deficit, psychological insights
• “Then behavioral economics will cease to be a distinctive label for
an approach as it becomes part of mainstream economic thinking,
evincing a healthy reunification of psychology and economics.”
(Camerer, 1999, P.10577)
Spectral approach to BE
Tu & Goldfinch, 1996
Tu & Goldfinch, 1996
Speare, Goldstein and Frey,
1975
Speare, Goldstein and Frey,
1975
Maclennan,198
2, P.68
Maclennan, 1982
Wong, 2002,
P.224
Wong, 2002
Marsh &
Gibb, 2011
Marsh & Gibb, 2011
Housing theory: an NBE-OBE
spectrum
Conclusions
• Policy makers are misapplying / inconsistently applying BE
• Evidence that BE policies/‘insights’ aren’t achieving their
objectives
• BE housing theory is failing to adequately explain its
assumptions and perspectives
• This failure masks inconsistency (internally and externally)
• It suggests that there is no clear NBE/OBE bifurcation in research
• There is a research gap at the OBE end of the spectrum
• An OBE approach is compelling, but needs theorisation
and an empirical programme
• This approach could address the ineffectiveness of BE policies
References
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DCLG (2014) Attitudinal research on financial payments to reduce opposition to new homes, DCLG, London
Dolan, P., Hallsworth, M., Halpern, D., King, D., Metcalfe, R. & Vlaev, I. (2012) Changing Behaviour: The mindspace
way, Journal of Economic Psychology, 33, PP.265-277
Dunning, R., Watkins, C.A., Inch, A., Payne, S., While, A., Young, G., Hickman, H., Bramley, G., McIntosh, S.,
Watkins, D. and Valler, D. (2014) The impact of the New Homes Bonus on attitudes and behaviour. Working Paper.
Department for Communities and Local Government
Ferrari, E., Henneberry, J., Leahy Laughlin, D., Tait, M., Watkins, C. & McMaster, R. (2011) Behavioural change
approach to the housing sector, Department for Communities and Local Government, UK
Jones, R. Pykett, J. & Whitehead, M. (2010) Governing temptation: Changing behaviour in an age of libertarian
paternalism, Progress in Human Geography, 35, 4, PP.483-501
Leggett, W. (2014) The politics of behaviour change: nudge, neoliberalism and the state, Policy & Politics, 42, 1, 3-19
Maclennan, D. (1982) Housing Economics, Longman Group, Singapore
Marsh, A. & Gibb, K. (2011) Uncertainty, Expectations and Behavioural Aspects of Housing Market Choices, Housing,
Theory and Society, 28, 3, PP. 215-235
Speare, A., Goldstein, S. & Frey, W. (1975) Residential Mobility, Migration and Metropolitan Change, Ballinger
Publishing Company, USA
Tu, Y. & Goldfinch, J. (1996) A Two-stage Housing Choice Forecasting Model, Urban Studies, V. 33, No. 3, PP.517537
Watkins, C. & McMaster, R. (2011) The Behavioural Turn in Housing Economics: Reflections on the Theoretical and
Operational Challenges, Housing, Theory & Society, 28, 3, PP. 281-287
Wong, G. (2002) A conceptual model of the household’s housing decision-making process: The economic
perspective, RURDS, 14, 3, P.217-234
To
Discover
And
Understand.