Research On Consumers’ Purchase Decision And Floor Choice In Real Estate Market In High Risky Situations

Determining the difference in the salient features between commercial housing and all other large durable goods, retail goods or service products is that housing completely relies on the land. However, earthquake is the biggest threat to this characteristic of housing. Before the occurrence of the Wenchuan earthquake, people rarely considered the impacts of emergency risky events such as earthquake on housing, whereas after that, people had changed greatly their concepts of buying houses. This has been a new challenge to the product strategies and marketing strategies of real estate companies. However, few scholars focused on the impacts of perceived risk and other factors on consumer’s psychology and decision-making behaviors after high risky events such as earthquake in the past, particularly in the real estate market.This study developed a model of the impacts of earthquake perceived risk on consumer’s value evaluation and repurchase and recommendation intention in real estate market after emergency risky events such as earthquakes. It was found that earthquake perceived risk impacted the important aspects of consumer purchase decisions. Earthquake perceived risk had a significant direct impact on perceived quality, perceived value and perceived price as well as an indirect negative impact on consumer repurchase and recommendation intentions via the intermediary role of perceived value. The model systematically investigated the impacts and mechanism of earthquake perceived risk at the individual level. Secondly, the study extended these results and performed a theoretical model of the relationship between earthquake perceived risk and consumer confidence. It was found that earthquake perceived risk had a direct negative impact on one dimension of consumer confidence, namely, confidence of economic development, but did not produce significant effect on confidence of reconstruction and real estate development. It had an indirect negative effect on confidence of life quality via the intermediary role of confidence of economic development. The study revealed the linkages among the dimensions of consumer confidence as well. Confidence of reconstruction and economic development produced a significant positive effect on confidence of reconstruction and real estate development, and confidence of economic development played a significant effect on confidence of life quality positively. Finally, based on analysis of the actual transaction data in the real estate market, this study conducted research of the impacts of earthquake perceived risk on housing sales at the real estate industry level as well as the impacts on consumer floor choice behaviors at a more micro individual level. The results indicated that earthquake perceived risk made low-rise, multi-rise buildings more popular, as well as caused consumers preferred to buying lower floors in high-rise housing buildings after the earthquake.Significant theoretical contributions of this study include:1. From the perspective of the key elements determining consumers decision making in real estate market, this study imported an important variable named earthquake perceived risk. By examining the mechanism of the impacts of this variable on consumer perceived quality, perceived value and repurchase and recommend intentions, this research analyzed the role of the psychological variable of regret, explained the changing decision-making psychological and behaviors when facing a high risky situation, which extended the implication of risk perception theory in the areas of consumer behavior.2. The study further identified the factors that influenced consumer confidence, and explored the impacts of earthquake perceived risk on consumer confidence as well as the internal logic among the dimensions of consumer confidence, which provided a useful supplement for consumer confidence theories.3. The study analyzed consumer’s changing preference of floor choice after the earthquake, and discussed the mechanism, rules and processes of this special changing, which enrich literatures of consumer behavior and pricing theory in the field of real estate market. In addition, the study has important practical implications. It provides systematic theoretical basis and coping strategies for real estate companies and relevant government departments to get insight of the rapid changing consumer behaviors as well as to understand the mechanism when facing similar situations of emergency disasters such as earthquake in the future.