Choice Behavior of Commercial Property Attributes in an Emerging Market: A Multi-Criteria Decision Analysis

Abstract

Real estate investment decision-making is complicated by a blend of biases and economic challenges, along with the unique characteristics of each property. The study investigates the predictors of commercial property choice behavior in emerging markets, with a specific focus on Lagos, Nigeria. The study employed the Multi-criteria Decision Analysis (MCDA) framework with a specific focus on the Analytical Hierarchy Process (AHP). Data were collected from primary sources through a questionnaire survey of a sample of 601 randomly selected business owners. The study further selected nine (9) experts through an arbitral selection procedure who are actively practising as real estate brokers. The study reveals that location, property identity, and the nature of the business were paramount attributes in commercial property selection in Lagos State, Nigeria. Cognitive factors such as experience and representative heuristics significantly influenced decision-making, reflecting the reliance on past knowledge and perceived similarities amidst market volatility in obscure emerging markets. Macroeconomic volatility and the regulatory environment emerged as critical market dynamics shaping investment preferences.  This study is one of the very few studies that have investigated the predictors of commercial property choice behavior in emerging markets, with a focus on Lagos, Nigeria. This is one of the very few studies that contributes to the theoretical understanding of decision-making under uncertainty.