1. bookVolume 29 (2021): Issue 1 (March 2021)
Journal Details
License
Format
Journal
First Published
16 May 2013
Publication timeframe
4 times per year
Languages
English
access type Open Access

Role of Behavioral Biases in Real Estate Prices in Pakistan

Journal Details
License
Format
Journal
First Published
16 May 2013
Publication timeframe
4 times per year
Languages
English
Abstract

The study aims to explore the effect of behavioral biases on financial decision making in the real estate sector of Pakistan. The data of a sample of 244 real estate investors are collected through a survey carried out using different sources. The findings of the study show the relationship of different biases, including overconfidence, herding effect, gambler’s fallacy, and regret aversion on prices of real estate. Real estate prices are more affected by overconfidence and gambler’s fallacy than herding effect and regrets aversion bias in Pakistan. The findings furthermore reveal that these biases do not depend on gender, education, and demographics. It is recommended to carefully consider the market factors while making decisions in real estate, as the prices do not always show the real value of the property.

Keywords

JEL Classification

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