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Reasoning behind choices: rationality and social norms in the housing market behaviour of first-time buyers in the Czech Republic

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  • Martin Lux
  • Petr Gibas
  • Irena Boumová
  • Martin Hájek
  • Petr Sunega

Abstract

The main objective of this paper is to draw attention to the influence of social norms on housing market behaviour. The research is based on an in-depth qualitative study of first-time buyers in the Czech Republic. We found systemic deviations from economically rational behaviour (as defined by mainstream housing economic theory) that stem from the influence of a dominant housing social norm about what constitutes the ‘right’ housing tenure. We show how the influence of a social norm constrains financial, pragmatic, utility- or investment-based considerations of Czech home-buyers. Sociology can thus significantly contribute to recent econometric research about sources of housing market instability.

Suggested Citation

  • Martin Lux & Petr Gibas & Irena Boumová & Martin Hájek & Petr Sunega, 2017. "Reasoning behind choices: rationality and social norms in the housing market behaviour of first-time buyers in the Czech Republic," Housing Studies, Taylor & Francis Journals, vol. 32(4), pages 517-539, May.
    • Handle: RePEc:taf:chosxx:v:32:y:2017:i:4:p:517-539
    DOI: 10.1080/02673037.2016.1219331
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    References listed on IDEAS

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    1. Stijn Claessens & M. Ayhan Kose & Marco E. Terrones, 2011. "Financial Cycles: What? How? When?," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 7(1), pages 303-344.
    2. Ashot Tsharakyan & Petr Zemcik, 2011. "Rent Deregulation, Tenure Choice, and Real Estate Price Expectations," CERGE-EI Working Papers wp430, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Bracke, Philippe, 2013. "How long do housing cycles last? A duration analysis for 19 OECD countries," Journal of Housing Economics, Elsevier, vol. 22(3), pages 213-230.
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    1. Adrienne Csizmady & Lea Kőszeghy, 2022. "‘Generation Rent’ in a Super Homeownership Environment: The Case of Budapest, Hungary," Sustainability, MDPI, vol. 14(14), pages 1-18, July.
    2. Adrienne CSIZMADY & Ã gnes GYÅ RI & Ã gnes GYÅ RI, 2022. "No money, no housing security? The role of intergenerational transfers, savings, and mortgage in mobility within and into insecure housing positions in Hungary," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 13, pages 208-227, June.
    3. Broulíková, Hana M. & Huber, Peter & Montag, Josef & Sunega, Petr, 2020. "Homeownership, mobility, and unemployment: Evidence from housing privatization," Journal of Housing Economics, Elsevier, vol. 50(C).
    4. Li, Yaoyao & Qi, Yuan & Liu, Licheng & Hou, Yuchen & Fu, Shuya & Yao, Jingtao & Zhu, Daolin, 2022. "Effect of increasing the rental housing supply on house prices: Evidence from China’s large and medium-sized cities," Land Use Policy, Elsevier, vol. 123(C).

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