The approaches of the stated and revealed preference models in the housing choice process

Abstract

The housing choice and housing preference themes have been approached in various forms, based on different instruments such as market research, posoccupancy evaluation, demographic studies and discrete choice models. This article is focused on the methodology of discrete choice models. The basis of such models is the estimation of a utility function. Utility is the value that an individual attributes to a product or service through a combination of factors, based on the assumption that the alternative with the highest utility will be selected. Econometric models can be generated from stated preference and revealed preference data. This article discusses the differences among those approaches, emphasizing the method, the essence, the strengths and weaknesses of each one and presenting a case study with both types of data. A study concerned university student housing was undertaken. The results emphasise the differences between the revealed and stated preference models, indicating parameters that are similar in the process and those that make the actual behaviour to differ from the stated intentions.