<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>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.</p>
</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.

Role of Behavioral Biases in Real Estate Prices in Pakistan

Huazhong University of Science and Technology

Real Estate Management and Valuation

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Role of Behavioral Biases in Real Estate Prices in Pakistan"}

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...

Role of Behavioral Biases in Real Estate Prices in Pakistan

Published Online: Mar 13, 2021

Page range: 41 - 53

DOI: https://doi.org/10.2478/remav-2021-0005

Keywords
financial decision making, overconfidence bias, herding effect bias, gambler’s fallacy bias, regret aversion bias, real estate sector

© 2021 M Asad Saleem Malik et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Role of Behavioral Biases in Real Estate Prices in Pakistan

Published Online: Mar 13, 2021

Page range: 41 - 53

DOI: https://doi.org/10.2478/remav-2021-0005

Keywordsfinancial decision making, overconfidence bias, herding effect bias, gambler’s fallacy bias, regret aversion bias, real estate sector

© 2021 M Asad Saleem Malik et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
financial decision making, overconfidence bias, herding effect bias, gambler’s fallacy bias, regret aversion bias, real estate sector