The decision‐making behaviour of office occupiers
| Pages | 307-319 |
| DOI | https://doi.org/10.1108/14635780410550876 |
| Published date | 01 August 2004 |
| Date | 01 August 2004 |
| Author | Chris Leishman,Craig Watkins |
| Subject Matter | Property management & built environment |
The decision-making behaviour of
office occupiers
Chris Leishman
Department of Building Engineering and Surveying, Heriot-Watt University,
Riccarton, UK
Craig Watkins
Department of Land Economy, University of Aberdeen, Kings College,
Aberdeen, UK
Keywords Decision making, Office buildings
Abstract Typically, studies of the occupiers’ choice of office property have focused on the influence
of location. Following the standard behavioural assumptions of neo-classical economics, the firm is
assumed to make the rational profit-maximising decision on the basis of full information. All firms
are implicitly assumed to be homogeneous. This general approach eliminates much of the
complexity from the decision-making process. This paper uses evidence from a survey of over 100
office occupiers in Edinburgh to examine the influence of a broader range of factors on individual
firms’ choice of office. Using logistic regression techniques on the survey data, the empirical
analysis shows that by taking account of heterogeneity of firms, it is possible to identify the type of
property occupied. Firms’ decisions are closely related to their size, business type and whether the
market they serve is local, regional or national.
1. Introduction
From a contents analysis of the major US and UK real estate journals, Levy and Henry
(2001) provide evidence of the increasing methodological domination of applied
neo-classical economics. Although, in a recent review article, Diaz (1999) highlighted
the mutli-disciplinary nature of UK property research, and, in particular, work on the
development process which adopts institutionalist and structure-agency perspectives,
this new evidence suggests that published work in British outlets is starting to follow
the lead from the USA where the neo-classical approach has dominated for three
decades.
Clapp and Myers (2000) outline the extent to which urban property research has
undergone a Kuhnian paradigm shift. The rich tradition of applied “real estate and
urban land economics” that can traced from James A. Graaskamp, through Richard
Ratcliff, Homer Hoyt and Ernest Fisher back to Richard T. Ely was overthrown by the
urban economics paradigm (or the new urban economics (NUE)) in the 1960s and 1970s
(Weiss, 2000). This change heralded the substitution of inductive methods, based on
the direct observation of facts, by deductive modes of thought that deploy a set of
assumptions in order to deduce logical conclusions. The adoption of this mode of
reasoning imposes constraints on the types of research questions that might be asked
and the methods that can usefully be applied. Consequently researchers have focused
on property market outcomes (such as prices, and levels of development activity) and
have sought to derive and test parsimonious explanations of these observed
phenomena. Typically this has been based on the development of increasingly
sophisticated econometric models. The process, by which observed prices and output
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Decision-making
behaviour
307
Received January 2002
Accepted December 2002
Journal of Property Investment &
Finance
Vol. 22 No. 4, 2004
pp. 307-319
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/14635780410550876
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