The Decision Making Processes in Accommodation of Three Respondents - Research Paper Example

Table of Contents Executive Summary 2 Introduction 2 1. Accommodation Options 4 2. Evaluative Criteria in Choosing Accommodation 8 3. Creation of Decision Matrix 11 3.1 Decision Matrix for Respondent A 13 3.2 Decision Matrix for Respondent B 14 3.3 Decision Matrix for Respondent C 15 4. Analysis of Choices 16 4.1 Personal Characteristics 16 5. Analysis of Behaviour of Respondents 18 Conclusion 20 Bibliography 21 Executive Summary This report is an analysis an analysis of the decision making processes in accommodation of three respondents. Respondent A is a 22 year old male sophomore student at the University of Sydney, respondent B is a 37 year old lawyer recently appointed as a senior partner in his law firm in Sydney and is married for two years with a child aged 18 months while respondent C is a 28 year old, single female university graduate with a postgraduate degree in Political Science and Studies from the Central Queensland University in North Rockhampton and currently under paid internship at the United Nations. The report presents the rankings of six different evaluative criteria considered in housing- location, price, security, occupation, size and occupation or gender of housemate. The report then presents the three respondents’ ranking of the accommodation options according to the evaluative criteria and places them in a decision matrix. The most likely option is suggested using the compensatory decision rule. The report then analyses the decisions of the three respondents and demonstrates the influence of factors such as personality and demographic characteristics on consumer decision making in accommodation. Introduction The choice of accommodation is a major decision making process in many people’s lives. Unlike minor consumption choices such as what car to buy or which clothes to wear, deciding where to live involves consideration of many factors. For instance, is it affordable to buy a house or to rent one? Can I afford the mortgage payments? Which is the safest place to live in? What about the size, does it fit my personal tastes and preferences? Are you willing to share accommodation or do you expressly require privacy? Is the location convenient for you current occupation? Does it meet your family’s needs? Consideration of such factors and many others can make the decision very complicated. This report presents an analysis of the decision making processes in accommodation of three respondents. Respondent A is a 22 year old male sophomore student at the University of Sydney, respondent B is a 37 year old lawyer recently appointed as a senior partner in his law firm in Sydney and is married for two years with a child aged 18 months while respondent C is a 28 year old, single female university graduate with a postgraduate degree in Political Science and Studies from the Central Queensland University in North Rockhampton and currently under paid internship at the United Nations. The report considers six accommodation options and develops six evaluative criteria that people might consider when choosing their accommodation- location, price, security, occupation, size and occupation or gender of housemate in the case of shared accommodation. The report first lists the accommodation options. The report then shows the results of the three different respondents’ ranking of the 6 evaluative criteria and their ranking of the options according to the evaluative criteria in a decision matrix. The report then presents the most likely or suggested accommodation choice using the compensatory decision rule where the weights of the evaluative criteria are multiplied by the ranking of the options. After applying the compensatory decision rule, the report analyses the decisions of the three respondents based on their personal characteristics by drawing on theories in consumer behaviour from journals to support an analysis of their choices based on demographics and personality. The report then concludes by demonstrating the role of such influences on major consumer decision making. 1. Accommodation Options 1.1 Option 1: Buying a one bedroom apartment at Naughton Street in Carlton, near Melbourne central business district at $ 320,000. The apartment is located with close proximity to Carlton shopping centre and the Melbourne central business district and includes parking and amenities such as laundry and garbage collection. 1.2 Option 2: Sharing a four bedroom house with a young married couple in New Auckland near Gladstone City, Queensland for $230 a week. The house is fully furnished and rent includes utility bills such as water, electricity, garbage collection and satellite TV. The house is located in a gated community with excellent security close to the road to Gladstone. 1.3 Option 3: Renting a one bedroom apartment in Kent Street near China Town, Sydney for $630 a week. Rent includes access to shared recreational facilities such as gym, swimming pool and amenities such as internet connectivity and utility bills for water, electricity and garbage collection. Apartment is fully furnished with refrigerator, washing machine and furniture and located within walking distance to local shopping centre and transport facilities and has a wonderful view of Sydney. 1.4 Option 4: Renting a two bedroom townhouse in Nedlands, Perth for $ 475 a week which includes front and rear courtyard, laundry and garbage collection services. 1.5 Option 5: Sharing a fully furnished student room near Central Station, Sydney for $ 145 a week near Central Station, Sydney. A minutes walk to train and bus stations. Rent inclusive of utility bills and room furnished with bed, DVD player, TV, wardrobe and includes free internet connectivity. Option 6: Purchasing a 3 bedroom maisonette in Chester Hill, NSW at $299,000. Vey spacious unit with rear courtyard located in close proximity to primary and secondary schools and various recreational facilities such as golf course and park. House is located in a gated community with excellent security and amenities such as garbage collection. 2. Evaluative Criteria in Choosing Accommodation There are various reasons why different people consider when choosing their accommodation options. 2.1 Location One of the most important criteria people consider in choosing their accommodation is location. The accommodation option-whether a house, apartment or even room, must be situated in a location that is convenient to the person’s unique characteristics and interests. The choice of location is influenced by factors such as personal occupation, safety/security and in turn influences other factors such as price. For instance, a student in a Sydney based university would logically look for accommodation within or around Sydney and closest to the university. On the other hand, older and more mature professionals with families would prefer calmer and less crowded suburbs away from city centres situated close to educational and recreational facilities for their children. Location includes consideration of proximity to schools, recreational facilities such as parks and sports stadiums, shopping centres and accessibility to public transportation. 2.2 Price/Affordability Affordability of the accommodation option also ranks closely to location in importance when choosing accommodation options. Price is in turn influenced by factors such as occupation and social status. Persons would rarely opt for accommodation options outside of their income range and in most cases will consider the financial sustainability of their eventual choice. For instance, it would be unfeasible for a non-income earning student to rent a costly city view apartment or purchase a four bedroom mansion in a gated community which is financially unsustainable. 2.3 Security/Safety Closely related to location as criteria for choosing accommodation is safety and security. Persons often consider their personal safety or that of their families when choosing their eventual accommodation option. For instance, persons with families that include young children would prioritize accommodation in areas considered more secure with features such as access to or accessibility to police services, adequate street lighting and the security of gated communities. A person will also consider their unique security needs such as safe and secure car parking when making their final accommodation choice. 2.4 Occupation In considering their accommodation options, people are more likely to select choices which are most convenient to their immediate or future occupations. The choice of accommodation should fit their unique occupational needs in terms of affordability and proximity to place of work. For instance, a student may opt to share a room or an apartment with a fellow student in a hostel close to the university. On the other hand, a seasonal factory worker may prefer to rent accommodation closer to their place of work (factory) while a senior partner in an established law firm would opt for longer term accommodation by purchasing a mansion in a gated community in the vicinity of where their offices are located. 2.5 Size In choosing their eventual accommodation option, most people factor in size as a critical determinant. The house, apartment or room selected must meet the person’s unique demands and size preferences. For instance, married people with families would opt for 3 or 4 bedroom houses while bachelors would be comfortable with one bedroom city view apartments. 2.6 Occupation/Gender of Housemates Some accommodation options include sharing living spaces. In advertising offers for shared accommodation, people often disclose preferences for the occupation and gender of their prospective housemates. For instance, female students sharing rooms in hostels often impose gender restrictions, strictly stipulating that housemates must be female. Similarly, married couples offering shared accommodation often prefer to share with professionals. (Quester and Pettigrew 2011) 3. Creation of Decision Matrix Evaluative Criteria→ Accommodation Options ↓ Location Price Security Occupation Size Occupation /gender of housemates Option 1: Buying a one bedroom apartment in Carlton for $320, 000. Option 2: Sharing a four bedroom house with a married couple in New Auckland at $230 a week. Option 3: Renting a one bedroom apartment in Kent Street, Sydney for $630 a week. Option 4: Renting a two bedroom townhouse in Nedlands, Perth for $475 a week. Option 5: Sharing a fully furnished student room near Central Station, Sydney for $ 145 a week. Option 6: Purchasing a 3 bedroom mansion in Chester Hill, NSW at $299,000. The importance of the evaluative criteria to three respondents Evaluative criteria A B C Location 5 6 5 Price 6 4 3 Security 3 5 4 Occupation 2 3 2 Size 1 2 6 Occupation /gender of housemates 4 1 1 Ranking Scale 6- Extremely important 5- Very important 4-Significantly Important 3-Slightly important 2-Indifferent 1-Least important Application of Compensatory Decision Rule According to the compensatory decision rule, the most likely option is arrived at by selecting the highest total combined score of each option’s performance ratings multiplied by the weights (importance) of the evaluative criteria 3.1 Decision Matrix for Respondent A Evaluative Criteria→ Accommodation Options ↓ Location 5 Price 6 Security 3 Occupation 2 Size 1 Occupation /gender of housemates 4 Total Option 1 2 (10) 1 (6) 4 (12) 5 (10) 4 (4) 1 (4) 46 Option 2 3 (15) 5 (30) 5 (15) 3 (6) 3 (3) 6 (24) 93 Option 3 4 (20) 3 (18) 3 (9) 4 (8) 5 (5) 3 (12) 72 Option 4 5 (25) 4 (24) 1 (3) 1 (2) 2 (2) 4 (16) 72 Option 5 6 (30) 6 (36) 2 (6) 2 (4) 6 (6) 5 (20) 102 Option 6 1 (5) 2 (12) 6 (24) 6 (12) 1 (1) 2 (8) 62 Decision: Respondent A is a 22 year old male sophomore student at the University of Sydney. From the application of the compensatory decision rule in this matrix, respondent A is most likely to opt for option 5 to share a fully furnished student room near Central Station, Sydney for $145 a week. 3.2 Decision Matrix for Respondent B Evaluative Criteria→ Accommodation Options ↓ Location 6 Price 4 Security 5 Occupation 3 Size 2 Occupation /gender of housemates 1 Total Option 1 5 (30) 6 (24) 4 (20) 6 (18) 6 (12) 3 (3) 107 Option 2 4 (24) 2 (8) 5 (25) 2 (6) 2 (4) 5 (5) 72 Option 3 2 (12) 5 (20) 3 (15) 4 (12) 3 (6) 4 (4) 69 Option 4 3 (18) 3 (12) 2 (10) 3 (9) 4 (8) 2 (2) 59 Option 5 1 (6) 1 (4) 1 (5) 1 (3) 1 (2) 6 (6) 26 Option 6 6 (36) 4 (24) 6 (30) 5 (15) 5 (10) 1 (1) 116 Decision: Respondent B is a 37 year old lawyer recently appointed as a senior partner in his law firm in Sydney and is married for two years with a child aged 18 months. From the application of the compensatory decision rule in the above matrix, respondent B is most likely to choose option 6 and invest in the purchase of a four bedroom maisonette in the Chester Hill suburbs at the cost of $299,000. 3.3 Decision Matrix for Respondent C Evaluative Criteria→ Accommodation Options ↓ Location 5 Price 3 Security 4 Occupation 2 Size 6 Occupation /gender of housemates 1 Total Option 1 6 (30) 6 (18) 5 (20) 4 (8) 4 (24) 4 (4) 104 Option 2 3 (15) 4 (12) 3 (12) 3 (6) 2 (12) 5 (5) 62 Option 3 4 (20) 5 (15) 2 (8) 1 (2) 3 (18) 3 (1) 64 Option 4 2 (10) 2 (6) 1 (4) 6 (12) 5 (30) 2 (1) 63 Option 5 1 (5) 1 (3) 4 (16) 5 (10) 1 (6) 6 (1) 41 Option 6 5 (25) 3 (15) 6 (4) 2 (4) 6 (36) 1 (1) 85 Decision: Respondent C is a 28 year old, single female university graduate with a postgraduate degree in Political Science and Studies from the Central Queensland University in North Rockhampton and currently under paid internship at the United Nations. From the application of the compensatory decision rule in the decision matrix, respondent C is most likely to choose the option of purchasing a one bedroom apartment in Carlton, near Melbourne at $ 320,000. 4. Analysis of Choices 4.1 Personal Characteristics Respondent A Respondent A is a 22 year old male sophomore student who lives in Rockhampton but is currently pursuing an undergraduate degree at the University of Sydney. He chooses sharing a student room in Sydney for $ 145 a week. In his ranking of the evaluative criteria, the student ranks price (or affordability) and location as the most important and convenient to his current needs. The student prioritizes or gives more weight to accommodation options that are affordable given his non-income earning status and located in Sydney with close proximity to the University of Sydney. His choice is also influenced by the fact that the room is fully furnished which would lower the costs associated with purchasing furniture, computers and even entertainment accessories. Furthermore, he is most likely to choose the sharing option as it is ideally suited for short term student accommodation due to affordability. He ranks the occupation or gender of his housemate and security closely behind price and location as he is more likely to prefer sharing with a student and due to concerns over studying away from home. The student gives least weight to size as criteria owing to his short term needs and his single status. Respondent B Respondent B is a married 37 year old senior partner at a law firm in Sydney. He is most likely to invest in the purchase of a four bedroom maisonette in the Chester Hill suburbs at the cost of $299,000. His ranking of the evaluative criteria is based on several considerations. He prioritizes location as he has to find accommodation in close proximity to his place of work and has to consider the education of his young child. He also has to provide a stable home for his young family and would therefore opt for secure longer term accommodation by purchasing a mansion. His choice of a maisonette in the Chester Hill suburbs fits with his ranking of security and proximity to education and recreational facilities for his family. Given his high income earning status, he ranks price below location and security. What is unusual about his rankings is the relative unimportance given to size considering his most likely option is a four bedroom house. He ranks occupation or gender of housemates lowest as he does not wish to share accommodation. Respondent C Respondent C is a single, 28 year old graduate with a master’s degree in Political Science and Studies from Central Queensland University. She is most likely to choose the option of purchasing a one bedroom apartment in Carlton, near Melbourne at $ 320,000. She is also under internship at the United Nations and currently resides in Rockhampton from where she is based at a local NGO working for the World Bank. She ranks size above all other evaluative criteria, apparently a personal preference. Her prioritization of location and security appears to indicate a desire to seek long term employment near Sydney. Her most likely option of buying a one bedroom apartment in view of her ranking of price is most likely due to a combination of her high income earning potential having completed her Master’s degree and her high income background. Her choice of apartment on the prestigious Carlton Street shopping district is also influenced by personal tastes and other criteria not included in the matrix such as the features of the accommodation option. 5. Analysis of Behaviour of Respondents Respondent A, a 22 year old male university student, prioritizes affordability (price) and location in selecting his accommodation options. This is consistent with the behaviour of male students at his age as predicted by Amole (2009) who studies residential satisfaction in student housing in Nigerian Universities and concludes that male students are more likely to prefer accommodation options which offer value for money in providing furnishings and facilities at lower cost. His demographic characteristics- age and socio economic background from a middle income family background- are also consistent with the behaviour of young male students who have indifferent attitudes as compared to female students towards shared accommodation (Amole 2009). The respondents’ personality traits include a liberal, extroversive and outgoing nature and therefore his most likely choice of independent out-of-campus accommodation is an accurate reflection of his personality as argued by Vintel et al (1980) and Moos and Lee (1979). Respondent B’s choice of a serene, calmer suburban setting is also consistent with his demographic characteristics. As a 37 year old professional with a family, he is most likely to and accurately prioritizes the location and security expected in the Chester Hills maisonette in a gated community. According to Grant (2004), gated communities are an attraction for people seeking secure settings under which their families can flourish and seeking longer term and more stable accommodation. Having been recently promoted as senior partner, he also expects a stable income source and is more likely to “settle” down and pursue his career goals as is characteristic of professionals with young families (Gronhaug et al 1987). In contrast to respondent B’s choice, respondent C prefers an accommodation option which strongly mirrors her personal tastes and preferences. As indicated by Skaburskis (1997) single females in high income brackets or those with high income prospects are more sensitive of their self image and tend towards the purchase rather than renting of homes or properties which reflect their personal identities. Respondent C is also an introvert and a very private person and is therefore inclined to prioritizing accommodation options which offer privacy according to Altman’s privacy regulation theory (Vintel et al 1980). Respondent B’s choice of accommodation is heavily influenced by the needs of his family. His choice of accommodation is more determined by automatic influences such as family situation rather than personal preferences as argued by Bargh (2002) and Deborah and Lee (2004). He prioritizes proximity to educational and recreational facilities probably guided by the interests of his young daughter and he and his wife’s collective desire to provide quality education for her. As argued by Goux and Maurin (2005), high income households are more likely to make accommodation decisions in light of their children’s educational needs and would often prefer that their children study in less overcrowded areas which are perceived to improve their educational performance. On the other hand, respondents A and C are unconstrained by family considerations and their accommodation options are prioritized according to their own unique personal interests and characteristics (Davis 1976: Butler et al 1984). However, respondent C’s choice is also influenced by her high income family background (Deborah and Lee 2004). Respondent A’s temporal nature as a student also qualifies his preference for shorter term and more flexible accommodation as opposed to B and C who prefer to invest in the purchase of homes (Davis 1976). Conclusion The report analysed the decisions of three respondents, a 22 year old university student in Sydney, a 37 year old lawyer and a 27 year old female graduate with a postgraduate degree. The three respondents were asked to rank the 6 evaluative criteria- location, price, security, size, occupation and occupation/gender of housemates and 6 accommodation options according to their ranking of evaluative criteria. Based on their decisions calculated by the compensatory decision rule, it is suggested that the 22 year old student is most likely to choose shared accommodation at a fully furnished student room in Sydney for $ 145 a week, the lawyer would opt to purchase a four bedroom maisonette at Chester Hills suburbs for $299,000 and the female postgraduate would opt to buy a one bedroom apartment at Carlton for $ 320,000. The report shows that the three respondent’s choices are a reflection of their personality characteristics and demographics. Their rankings are different due to different personalities, occupations, ages and gender. For instance, the young male student is a non-income earner and appears comfortable to share flexible and affordable accommodation. On the other hand, the lawyer factors in his family’s interests in his ranking preferring the security and proximity to educational and recreational facilities offered by the suburbs. 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