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    The impact of residential property investors on house price escalation in Auckland, New Zealand : research report in fulfillment of the requirements for Doctor of Philosophy in Property, School of Economics and Finance, Massey University, New Zealand
    (Massey University, 2024-07-24) White, David Jon
    Affordability and home ownership in Auckland New Zealand has been in decline over the past decade. Since the Global Financial Crisis in 2008, house affordability has decreased at an unprecedented rate, largely attributed to house price escalation with some mitigation from wage growth and interest rate decreases. The decline in the affordability of owner-occupation compared to renting has been particularly pronounced in Auckland and this has led to a decline in home ownership and political interest in the role of investors that could contribute to price escalation. This perceived role of investors has resulted in policy changes aimed at discouraging speculation. This research investigates the pricing decisions of investors in the Auckland housing market and the link to house price escalation and affordability of housing. This research investigates whether this sustained escalation in prices can be explained by bounded rationality in pricing decisions by comparison to a normative model. The methodology adopted is a mix of qualitative and quantitative methods. Qualitative methods are used to gather the stated preference of investors in relation to their investment motivations and pricing decisions was obtained via structured interviews with investors and institutional influencers, with reference to behavioural economic concepts and frameworks. Quantitative methods are used to quantify at the aggregate market level the deviation from normative pricing, and to quantify for explanatory purposes those components of pricing decisions that contribute to overpricing, using the user-cost equilibrium model. It is concluded that investors are inclined to over-price houses compared to what is predicted by a normative model, largely due to an over-estimation of capital gain expectations and an under-estimation of systemic risks. This over-estimation of capital gain expectation is self-reinforcing and leads to sustained over-pricing which influences the market in aggregate and therefore house price escalation.
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    Giving science innovation systems a 'nudge'
    (Talent First Network, 2019-10) de Jong K; Daellenbach U; Davenport S; Haar J; Leitch S
    In this article we consider the role that contextual factors play in science innovation systems - that is, the choice architecture, that influences the orientation and outcomes of publicly-funded research. More specifically, we examine how choice architects, particularly policymakers and funding administrators, can affect the decision-making behaviour of researchers. The context for today's science innovation systems continues to shift as governments seek solutions to the world's "grand societal challenges" such as climate change and ageing populations, in addition to greater and more demonstrable impact from funded research. This means that the assumptions of "basic research [being] performed without thought of practical ends" (Bush, 1945) that have shaped such projects, actually run counter to the growing expectations of greater commercialisation and use of multidisciplinary mission-led approaches. We argue that a closer examination of the choice architecture of publicly-funded research is required to understand and address how these potentially conflicting objectives may be pursued most productively through interventions that could formthe basis of a novel, behaviourally-based toolkit for science innovation policy.