Attributes Influencing Home Buyers Purchase Decisions - A Quanti

Southern Cross University
ePublications@SCU
Theses
2013
Attributes influencing home buyers' purchase

decisions : a quantitative study of the Wuhan
residential housing market.
Rong Zeng
Southern Cross University
Publication details
Zeng, R 2013, 'Attributes influencing home buyers' purchase decisions : a quantitative study of the Wuhan residential housing market',
DBA thesis, Southern Cross University, Lismore, NSW.
Copyright R Zeng 2013
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ATTRIBUTES INFLUENCING HOME BUYERS’ PURCHASE
DECISIONS: A QUANTITATIVE STUDY OF THE WUHAN
RESIDENTIAL HOUSING MARKET
Rong Zeng
Bachelor of International Economy and Trade, Wuhan University of
Science and Technology, Wuhan, China
Master of Finance, RMIT University, Melbourne, Australia
A thesis submitted to Southern Cross Business School, Australia, in
partial fulfillment of the requirements for the degree of
Doctor of Business Administration
December 2013
DECLARATION OF ORIGINALITY
I, Rong Zeng, hereby declare that the contents in this thesis are my own work. All of
the previously published or written material sources that are used in this thesis have
already been referenced, and all of the assistance from others on the thesis writing has
also been acknowledged accordingly.
Signature:
Date: December, 2013
Candidate: Rong Zeng
ii
ACKNOWLEDGEMENTS
I would like to express my sincere thanks to my supervisor, Dr. Anthony Yeong, for
his excellent guidance, encouragement and advice from the commencement to the
conclusion of this dissertation. His constant assistance, collaboration and critical
feedback provided me with the motivation to pursue the writing of this thesis.
I also would like to express my gratitude and appreciation to my supervisor, Dr. Tania
Von Der Heidt, who has been most generous with her time, effort, and big-hearted
support during the past years. All of her precious advice helped me to re-organise and
polish the whole thesis in the later stages.
I am thankful to John Revington, who provided his precious time for checking the
grammar, spelling and punctuation in my thesis. I would like to thank Ms. Sue White,
Ms. Joanne Olive and Ms. Margot Alexander for their superb administration of the
DBA program.
Most of all, I am deeply grateful to my parents, Mr. Fuqing Zeng and Mdm Qian
Wang, for their financial support, encouragement, and spirit while I studied for the
Doctor of Business Administration.
iii
LIST OF ABBREVIATIONS
ABS Australian Bureau of Statistics.

ANOVA analysis of variance
CDM consumer decision-making
DESA Department of Economic and Social Affairs
DPADM Division for Public Administration and Development Management
GDP gross domestic product
MANOVA multivariate analysis of variance
MLR multiple linear regression analysis
NBSC National Bureau of Statistics of China
NPC National People’s Congress
PCA principal components analysis
RICS Royal Institution of Chartered Surveyors
SDPC State Development Planning Commission (China)
SPSS Statistical Package for the Social Sciences
SQ service quality
REECI Real Estate Industry Entrepreneur Confidence Index
UK United Kingdom
USA United States of America
α alpha
χ2 chi-square
iv
TABLE OF CONTENTS
ATTRIBUTES INFLUENCING HOME BUYERS’ PURCHASE DECISIONS: A QUANTITATIVE
STUDY OF THE WUHAN RESIDENTIAL HOUSING MARKET ................................................... i
DECLARATION OF ORIGINALITY ......................................................................................ii
ACKNOWLEDGEMENTS.................................................................................................. iii
LIST OF ABBREVIATIONS ................................................................................................ iv
TABLE OF CONTENTS ....................................................................................................... v
ABSTRACT ..................................................................................................................... xi
LIST OF FIGURES ......................................................................................................... xiii
LIST OF TABLES ............................................................................................................ xv
LIST OF APPENDICES ...................................................................................................xvii
CHAPTER 1 INTRODUCTION TO THE RESEARCH ............................................................... 1
1.1 Chapter objective and structure ............................................................................ 1
1.2 Research background ........................................................................................... 1
1.3 Research problem and hypotheses ....................................................................... 3
1.4 Justification for the research ................................................................................ 6
1.5 Research methodology ......................................................................................... 8
1.6 Definition of terms ............................................................................................... 9
1.7 Delimitations of scope ........................................................................................ 11
1.8 Outline of the thesis............................................................................................ 12
1.9 Summary ............................................................................................................ 14
CHAPTER 2 LITERATURE REVIEW ................................................................................. 15
2.1 Introduction ........................................................................................................ 15
2.2 Parent theory: consumer behaviour and the purchase decision-making process16
v
2.2.1 Definition of consumer behaviour ............................................................... 17
2.2.2 Model of consumer behaviour ..................................................................... 19
2.2.3 Purchase decision-making process .............................................................. 21
2.2.3.1 Problem recognition stage........................................................... 21

2.2.3.2 Searching for information ........................................................... 23
2.2.3.3 Evaluation of alternatives ........................................................... 24
2.2.3.4 Purchase decisions ...................................................................... 26
2.2.3.5 The post-purchase process and customer satisfaction ................ 27
2.2.4 Major factors influencing consumer purchase decision-making ................. 31
2.2.4.1 Individual influence .................................................................... 32

2.2.4.2 Environmental influences ........................................................... 35
2.3 Consumer choice in the purchase of residential houses ..................................... 38
2.3.1 Introduction of global housing market ........................................................ 39
2.3.1.1 Definition of housing market ...................................................... 39

2.3.1.2 Development of the global real estate market............................. 40
2.3.1.3 An introduction to international housing market development... 41
2.3.2 Housing products and services .................................................................... 42
2.3.3 Consumer housing purchase choice ............................................................ 44
2.3.3.1 Hedonic model of housing .......................................................... 45

2.3.3.2 Identification of housing attributes ............................................. 47
2.3.3.3 Consumer housing choice decision ............................................. 51
2.3.4 Quality of housing services ......................................................................... 56
2.3.4.1 Categories of service mix............................................................ 56

2.3.4.2 Defining service quality in residential housing .......................... 57
2.3.4.3. Consumer service quality expectations ...................................... 58
2.3.4.4 Service quality dimensions and assessment tools ....................... 60
2.3.4.5 Assessment of service quality in the housing industry ............... 61
vi
2.4 China’s residential housing market .................................................................... 66
2.4.1 An overview of China’s residential housing sector ..................................... 66
2.4.1.1 General development of China’s real estate market ................... 67

2.4.1.2 A profile of China’s residential housing market in the last decade
(2002–2012) ............................................................................................ 70
2.4.1.3 Increasing investment in China’s residential housing market..... 72
2.4.1.4 Regional gaps .............................................................................. 74
2.4.2 The profile of Wuhan .................................................................................. 77
2.4.2.1 Residential housing market expansion in Wuhan ....................... 78

2.4.2.2 The relevant variables in an analysis of socio- demography ...... 78
2.5 Research justification ......................................................................................... 80
2.5.1 Gaps in the literature.................................................................................... 81
2.5.2 Importance and expansion of the residential housing market in China ....... 83
2.6 Research problem: Theoretical framework and hypotheses .............................. 85
2.6.1 The proposed research model ...................................................................... 86
2.6.2 Hypothesis development.............................................................................. 87
2.6.2.1 The housing attributes and the purchase decision (H1): .............. 87
2.6.2.2 Housing service quality provided by suppliers and the purchase
decision (H2) ........................................................................................... 89
2.6.2.3 Demographics and purchase decision (H3) ................................. 89
2.6.2.4 Housing attributes and satisfaction (H4) ..................................... 91
2.6.2.5 Service quality and post-purchase satisfaction (H5) ................... 92
2.7 Conclusion.......................................................................................................... 96
CHAPTER 3 RESEARCH METHODOLOGY ........................................................................ 97
3.1 Introduction ........................................................................................................ 97
3.2 Survey research method ..................................................................................... 99
3.2.1 Survey instruments .................................................................................... 100

vii
3.2.1.1 Interviews .................................................................................. 100
3.2.1.2 Questionnaire-based surveys .................................................... 101
3.2.2 Justification of the data collection method – mail questionnaire-based
survey.................................................................................................................. 102
3.2.3 Limitations of the survey research method................................................ 103
3.3 Questionnaire design ........................................................................................ 103
3.3.1 Questions in the questionnaire ................................................................... 104
3.3.2 Question development ............................................................................... 104
3.3.3 Question and response formats .................................................................. 107
3.3.4 Level of scales measurement ..................................................................... 108
3.3.5 Physical characteristics .............................................................................. 109
3.4. Sampling.......................................................................................................... 109
3.4.1 Target population ....................................................................................... 109
3.4.2 Sampling frame.......................................................................................... 110
3.4.3 Sample size ................................................................................................ 111
3.4.4 Selection of sampling design – stratified sampling ................................... 111
3.4.5 Pilot study .................................................................................................. 112
3.5 Survey ethics and administration of survey ..................................................... 114
3.5.1 Survey ethics.............................................................................................. 114
3.5.2 Administration of survey ........................................................................... 116
3.6 Data analysis processes .................................................................................... 117
3.6.1 Data processing.......................................................................................... 117
3.6.2 SPSS 20.0 .................................................................................................. 118
3.6.3 Reliability and validity .............................................................................. 118
3.6.4 Descriptive statistics .................................................................................. 120

viii
3.6.5 Inferential statistics .................................................................................... 121
3.7 Limitations of the research design ................................................................... 126
3.8 Conclusion........................................................................................................ 129
CHAPTER 4 ANALYSIS OF DATA ........................................................................ 130
4.1Introduction ....................................................................................................... 130
4.2 Preliminary data analysis ................................................................................. 130
4.2.1 Cleansing and screening of data ................................................................ 131
4.2.2 Demographic characteristics of respondents ............................................. 132
4.3 Factor analysis and creation of composite variables ........................................ 137
4.3.1 Factor analysis ........................................................................................... 137
4.3.2 New composite variables ........................................................................... 139
4.3.3 Examine the reliability of the composite variable ..................................... 143
4.3.4 Outliers ...................................................................................................... 144
4.3.5 Normality of distributions ......................................................................... 146
4.4 Descriptive analysis of data.............................................................................. 146
4.4.1 Descriptive statistics of ten variables ........................................................ 147
4.4.2 Descriptive statistics for post-purchase satisfaction .................................. 152
4.5 Data analysis – hypotheses testing ................................................................... 153
4.5.1 Logistic regression for testing Hypothesis 1 and Hypothesis 2................. 154
4.5.2 Testing Hypothesis 3 regarding demographics ......................................... 160
4.5.3 Testing Hypothesis 4 and Hypothesis 5: relationships between housing

attributes and post-purchase satisfaction levels .................................................. 170
4.6 Summary of research results ............................................................................ 177
4.7 Conclusion........................................................................................................ 177
ix
CHAPTER 5 CONCLUSIONS AND IMPLICATIONS ........................................... 180
5.1 Introduction ...................................................................................................... 180
5.2 Conclusions about the research hypotheses ..................................................... 183
5.2.1 Conclusion for Hypothesis 1: .................................................................... 183
5.2.4 Conclusions for Hypothesis 4: ................................................................... 194
5.2.5 Conclusions for Hypothesis 5: ................................................................... 195
5.3 Conclusion about the research problem ........................................................... 196
5.4 Contributions of the research and implications for theory ............................... 197
5.5 Implications for policy and practice ................................................................. 198
5.5.1 Implications for the residential housing industry ...................................... 199
5.5.2 Implications for home buyers .................................................................... 200
5.5.3 Implications for government ..................................................................... 201
5.6 Limitations of the research ............................................................................... 202
5.7 Opportunities for further research .................................................................... 204
5.8 Conclusion........................................................................................................ 205
References: ................................................................................................................. 207
Appendices ................................................................................................................. 228
x
ABSTRACT
Over the last decade the residential housing market has emerged as a lucrative,
fast-growing and increasingly competitive sector of China’s economy. Focusing on
Wuhan – one of the top ten cities in China – this thesis examines the impacts of
alternative housing attribute preferences and aspects of service quality on housing
purchase decisions and the post-purchase satisfaction of home buyers in China.
Specifically, the principal aims of this study are:

1) To identify the housing attributes that have the most influence on home buyers’
purchase decisions.
2) To determine whether the service quality provided by residential housing
suppliers significantly affects home buyers’ purchase decisions.
3) To assess the influence of the socio-demographic characteristics of home buyers
on the housing attributes and service preferences that influence their housing
purchase decisions.
4) To determine how the housing attributes and service quality provided by housing
suppliers affect home buyers’ post-purchase satisfaction.
While previous studies have investigated many aspects of the decision-making

processes of home buyers worldwide, we have a limited understanding of the
purchase behaviour of Chinese home buyers with respect to residential housing
selection and performance. The model developed in this research addresses this gap
by capturing the attributes of residential housing and housing providers’ service
quality that influence consumers’ purchase decisions and their post-purchase
satisfaction. The data collection method of a mail survey was used in this research. A
questionnaire was developed using items taken from previous studies but applied
specifically to Wuhan residents. A total of 478 questionnaires were returned.
xi
The collected data were analysed using Principal Component Analysis, Logistic
Regression, Multivariate Analysis of Variance and Multiple Linear Regression in
SPSS. The key findings of this research are as follows:
· A list of 33 attributes of housing products and 10 service quality attributes of
housing providers were generated from the literature.
· Only two housing attributes (location and aesthetics) positively influenced
housing purchase decisions. The quality of service provided by the housing
suppliers did not significantly influence purchase decisions.
· Demographic variables significantly influenced housing purchase decisions,
notably age, marital status, educational background, occupation and family status.
Gender and income did not significantly influence purchase decisions.
· Post-purchase satisfaction was influenced by three housing attributes: the
surrounding environment, external property appearance and space, and aesthetic
attributes. The quality of service provided by suppliers also had a significant
impact on home buyers’ post-purchase satisfaction.
This study contributes to an improved understanding of home buyers’ decision

making in China. The beneficiaries of this study include all participants in the housing
industry – from potential home buyers and house owners to housing
builders/marketers and government policy regulators, as well as academic
institutions. To better meet home buyers’ needs and achieve a competitive advantage,
marketers can use the research outcomes to focus more effort on those housing
purchase factors, which significantly influence home buyers’ purchase decision
making. Further, the outcomes of this research could also assist the Chinese
government in developing more appropriate housing policies.
xii
LIST OF FIGURES
Figure 1.1 The structure of Chapter 1 ..................................................................... 2
Figure 1.2 The theoretical framework model.......................................................... 5
Figure 1.3 Outline of the thesis ............................................................................. 13
Figure 2.1 Outline of Chapter 2 ............................................................................ 15

Figure 2.2 Outline of parent theory: consumer behaviour and purchase
decision-making ............................................................................................. 16
Figure 2.3 The model of consumer behaviour ...................................................... 20
Figure 2.4 Five-stage purchase decision-making process..................................... 21
Figure 2.5 Problem recognition process ............................................................... 22
Figure 2.6 Information search process .................................................................. 24
Figure 2.7 Evaluating and selecting alternatives process ..................................... 26
Figure 2.8 Purchase decision ................................................................................ 27
Figure 2.9 Consumer post-purchase behaviour .................................................... 28
Figure 2.10 Components and relationships within the disconfirmation concept .. 30
Figure 2.11 Factors influencing on consumer purchase behaviour ...................... 32
Figure 2.12 Outline of housing purchase choice theory ....................................... 38
Figure 2.13 The composition of the housing market ............................................ 39
Figure 2.14 Service-quality model ........................................................................ 59
Figure 2.15 A model of home buyer assessment of service quality ...................... 63
Figure 2.16 Capital construction investment in China.......................................... 73
Figure 2.17 Geography of Wuhan ......................................................................... 78
Figure 2.18 Saleable area of China’s residential housing market, showing the
strong growth in this market .......................................................................... 84
Figure 2.19 Total investment in the residential house market in China ................ 85
Figure 2.20 The theoretical model ........................................................................ 87
xiii
Figure 3.1 Outline of Chapter 3 ............................................................................ 97
Figure 3.2 The theoretical model .......................................................................... 98
Figure 4.1 Outline of Chapter 4 with sections and their interrelationships. ....... 131
Figure 4.2 The research model with composites ................................................ 153
Figure 4.3 Demographics influences on purchase decision ................................ 170
Figure 5.1 Structure of Chapter 5 ....................................................................... 182

Figure 5.2 Final tested model with significant paths .......................................... 184
xiv
LIST OF TABLES
Table 1.1 Exchange rate ........................................................................................ 10
Table 2.1 Definitions of consumer behaviour ....................................................... 18

Table 2.2 Intrinsic housing attributes and extrinsic housing attributes ................. 48
Table 2.3 Home buyers’ preferences across country contexts .............................. 52
Table 2.4 Service quality Attributes ...................................................................... 62
Table 2.5 Summary of service quality attributes mentioned in the literature ....... 65
Table 2.6 Development history of China’s real estate market .............................. 67
Table 2.7 Housing trade market comparison between Shanghai and Chengdu .... 75
Table 2.8 Structure of the workforce by industry type 2006 and 2011 ................. 80
Table 2.9 Demographic variables ......................................................................... 91
Table 2.10 Summary of the variables and related literature in the hypotheses..... 94
Table 3.1 Summary of variables in the questionnaire ......................................... 105

Table 3.2 Linking the research questions, hypotheses and statistical methods... 127
Table 4.1 Demographic statistic .......................................................................... 133

Table 4.2 Purchase decision ................................................................................ 136
Table 4.3 The output of KMO and Bartlett’s test ................................................ 138
Table 4.4 Eigenvalues and total variance explained ........................................... 138
Table 4.5 The signifacant housing purchase factors ........................................... 140
Table 4.6 Ten new variables for the subsequent hypotheses testing ................... 142
Table 4.7 Cronbach’s Alpha reliability analysis ................................................. 144
Table 4.8 The values of skewness and kurtosis of the variables. ........................ 147
Table 4.9 Perceptions towards Service quality ................................................... 148
Table 4.10 Perceptions towards surrounding environmental attributes .............. 148
Table 4.11 Perceptions towards location of facilities and services ..................... 149
xv
Table 4.12 Perceptions towards private living space .......................................... 149
Table 4.13 Perceptions towards exterior design and space ................................. 150
Table 4.14 Perceptions towards neighbourhood amenities ................................. 150
Table 4.15 Perceptions towards aesthetics .......................................................... 151
Table 4.16 Perceptions towards essential housing attributes .............................. 151
Table 4.17 Perceptions towards presence and availability of storage room ....... 151
Table 4.18 Descriptive statistics of financial consideration ................................ 151
Table 4.19 Descriptive statistics for post-purchase satisfaction ......................... 152
Table 4.20 Variable description in Hypothesis 1 and Hypothesis 2 .................... 155
Table 4.21 Reduced mean score of ten house purchase factors .......................... 156
Table 4.22 The result of logistic regression analysis .......................................... 156
Table 4.23 The results of hypotheses 1 and 2 ..................................................... 160
Table 4.24 Variables in Hypothesis 3 .................................................................. 162
Table 4.25 Output stage 1: Box's M test of equality of covariance matrices ...... 162
Table 4.26 Output stage 2: Tests of between-subjects effects ............................. 163
Table 4.27 The results for Hypothesis 3 ............................................................. 169
Table 4.28 Variable description in Hypothesis 4 and Hypothesis 5 .................... 172
Table 4.29 Multiple regression model summary................................................. 173
Table 4.30 ANOVA summary ............................................................................. 174
Table 4.31 Multiple regression model coefficients ............................................. 174
Table 4.32 The results for Hypotheses 4 and 5 ................................................... 176
Table 4.33 The test results of research hypotheses ............................................. 178
Table 5.1 Housing affordability in some main cities in China, 2011 .................. 193
xvi
LIST OF APPENDICES
Appendix 1 Questionnaire in English Version .................................................... 229
Appendix 2 Questionnaire in Chinese Version ................................................... 238
Appendix 3 List of the residential housing companies in Wuhan ...................... 244
Appendix 4 The remained housing attributes and services attributes with factor
loadings greater than 0.5 .............................................................................. 245
xvii
CHAPTER 1 INTRODUCTION TO THE RESEARCH
1.1 Chapter objective and structure

The main objectives of this chapter are to provide background information and a
summary of the research undertaken in this study.
This chapter has nine sections. After the introduction in Section 1.1, the research
background is provided in Section 1.2. The research issues are identified in Section
1.3. Section 1.4 briefly discusses the justification for the research. The research
methodology is summarised in Section 1.5, followed by definition of terms in
Section1.6. The delimitations of scope of the research are presented in Section 1.7.
Thesis chapter outlines are described in Section 1.8. Finally, the chapter concludes in
Section 1.9. The structure of this chapter is shown in Figure 1.1 (see next page).
1.2 Research background

China’s economy has been growing rapidly since the late 1970s when significant
economic reforms and the country’s Open Door Policy were implemented. Following
these changes, China’s residential housing industry also experienced fast development
and expansion. This study is concerned with home buyers’ purchase decisions and
adopts a case study approach focusing on home buyers in Wuhan.
China’s real estate was owned, managed, and controlled by the government under a
socialist central-planning economic system until 1988, when reforms were
implemented. In the last two decades, the residential housing industry has evolved
from a government controlled sector to a commercial one. The market-oriented
housing reforms in 1998 and the high market demand for residential houses have
caused housing prices to jump significantly in the past ten years all over the country.
1
Figure 1.1 The structure of Chapter 1
1.1 Chapter objectives and Structure
1.2 Research background
1.3 Research problem and hypotheses
1.4 Justification of the research
1.5 Research methodology
1.6 Definition of terms
1.7 Delimitation of the research
1.8 outline of the research
1.9 Conclusion
Source: Developed for this research
The urban housing market has become a lucrative, fast-growing segment of China’s
economy in recent years (Fung, Jeng, & Liu, 2010; Peng, Groenewold, He, Li, & Yi,
2010; Tian, Yang, & Zhang, 2007; Wang, Yang, & Liu, 2011). China’s urban
population increased by 114.30 million from 2000 to the end of 2010, and home
ownership increased 52.60 per cent from 2000 to 2010.
There are three major groups of investors in the current housing market in China:
domestic residential housing dealers, Hong Kong and Macau dealers, and private
customers purchasing residential housing. In last decade there has been a substantial
2
and rapid increase of investment from each of the above three groups of investors,
who invested 4,300 billion RMB, 207.90 billion RMB, and 603.60 billion RMB
respectively in 2010 (China Real Estate Statistics Yearbook, 2011). This study focus
on investigating the last group of investor – home buyers in China.
China’s residential housing market is experiencing a strong growth period. Wuhan, as

one of the top ten cities in China, is no exception. To maintain booming growth,
marketers and analysts of China’s residential housing industry require an in-depth
understanding of home buyers’ choice criteria and their satisfaction levels regarding
housing attributes and service quality. Armed with this understanding, they can
provide consumers with appropriate products and services. To survive in the housing
market, both previous and new housing builders and marketers have been forced to
improve their standards and research home buyers’ needs. Home buyers’ perceptions
of providers and their choice criteria are numerous (Fierro, Fullerton, &
Donjuan-Callejo, 2009; Spetic, Kozak, & Cohen, 2005). They include such
considerations as perception of the overall condition of the house, the surrounding
environment and the level of after-sales service provided by suppliers. In addition,
learning what influences home buyers’ satisfaction levels, and identifying their needs
and using these needs as targets, can help housing suppliers to achieve a sustainable
competitive advantage.
1.3 Research problem and hypotheses

A small number of studies have been conducted in other Chinese metropolises such as
Beijing, Shanghai and Guangzhou, to investigate the connections between home
buyers’ purchase behaviour and housing attributes. However, these previous studies
indicated that the effect of housing attributes on home buyers’ purchase behaviour
varies across cities and socio-demographic sub-segments in China (e.g.: Wang & Li,
2004 & 2006; Huang & Chen, 2010). Furthermore, the research problem regarding
the connection between home buyers’ purchase decisions and services has not
3
previously been investigated in the residential housing industry in China. Given that
China’s residential housing market is complex, fast growing and highly competitive,
the purpose of this research is to investigate how home buyers make their purchase
decisions based on what they consider to be desirable housing attributes. It does so
using a case study in the Wuhan housing market. The research problem is:
Which major residential housing attributes and services provided by housing
suppliers influence home buyers’ purchase decisions and post-purchase satisfaction
in China?
Hence, the research questions are:
Research question 1: Which housing attributes have the most influence on home
buyers’ purchase decisions in China?
Research question 2: Do services provided by residential housing suppliers
significantly influence home buyers’ purchase decisions in China?
Research question 3: Which individual home buyers’ characteristics influence their
evaluation of housing attributes and their service choices in China?
buyers' satisfaction levels with their purchase decisions in China?
Research question 5: Do services provided by the suppliers significantly influence
home buyers' levels of satisfaction with their purchase decisions in China?
To address the above research problem, five research hypotheses have been developed
from the literature. A theoretical framework based on the literature has been
developed in Chapter 2 for testing these five hypotheses. To examine the hypotheses
the research framework focuses on the last three stages of the five-stage model of
consumers’ purchase decision process, as is presented below in Figure 1.2 (see next
page). The five hypotheses are:
H1: Consumers’ housing purchase decisions in China are influenced by housing

attributes.
4
H2: Consumers’ housing purchase decisions in China are influenced by the service
quality provided by suppliers.
H3: Demographic variables (gender, age, material status, education, occupation,

family annual income, number of children, family size) influence consumers’
evaluation of housing attributes and service choices in housing purchase decisions.
H4: The overall satisfaction of consumers with their purchase decisions is influenced
by their evaluations of housing attributes.
by their evaluations of service quality provided by suppliers.
Figure 1.2 The theoretical framework model

Home-buyers search, evaluate and select Making purchase Post-purchase
alternatives of commodity housing decision satisfaction
Housing intrinsic
Attributes
Housing Attributes
Housing extrinsic
H4
attributes
H1
H3 Purchase Satisfaction
Demographic
decision Level
H5
Reliability
Responsiveness H2
H5
Housing service
Assurance
quality
Empathy
Tangibles
5
1.4 Justification for the research
This research can be justified on the following four grounds:
· gaps in the literature
· the importance and expansion of the housing market in China
· the methodology used in this study
· potential contributions of the research outcomes.
Although there have been a few studies into housing attributes affecting home buyers’
purchase behaviour in some of China’s other metropolises, such as Beijing, (Wang &
Li, 2004), Guangzhou (Wang & Li, 2006), and Shanghai (Wang, Yang & Liu, 2011),
the findings of these previous studies vary across cities (e.g. home buyers in Beijing
prefer housing intrinsic attributes, but Guangzhou residents have more willingness to
choice neighbourhood attributes). Therefore, the first justification for this research is
that no prior academic research has examined the home buyers’ purchase decision
processes influenced by both housing attributes and services provided by housing
suppliers in Wuhan. These findings are consistent with the literature which
demonstrates social and cultural considerations heavily impact the relative importance
of different housing attributes in determining consumers’ housing decisions (as
discussed in Section 2.3.3.3). A gap in the literature addressed in this thesis is the
absence of a sound theoretical basis for how both purchase decision-making and
post-purchase satisfaction are affected by housing attributes and services. This
research makes a significant contribution to the body of knowledge in this area, and it
is believed to be one of very few studies undertaken in Asia on this topic.
The second justification for this research is the increasing purchase of residential
housing in China. The volume of housing, and the total investment in the housing
market, are huge and have increased rapidly over recent years (China Real Estate
Statistics Yearbook, 2010 & 2011). Since residential houses became a commercial
product in China, and since the market-oriented housing reforms in 1998, the
6
government has established a series of laws to promote this industry and protect home
buyers’ benefits. Sustainable growth is an important issue for China’s residential
housing industry. Thus, this research is justified because high levels of competition
and high growth rates encourage the housing market to focus on factors influencing
purchase decisions in order to meet the needs of both potential home buyers and
house owners. Research outcomes will therefore be of importance to housing
companies.
In addition, researchers seldom use the methodology adopted in this research. Data
input from the marketplace has been obtained using a mail-based survey of members
of the Wuhan residential housing companies. All of the participants were chosen by
employing a stratified random sampling procedure based on location of residence.
This research examined the research problem and research hypotheses by using an
inferable statistics software program for analysing data. The Statistical Package for
the Social Sciences (SPSS) 20.0 software was used in this research. Principal
Component Analysis, Logistic Regression, Multivariate Analysis of Variance
(MANOVA) and Multiple Linear Regression were applied. None of these testing
methods has previously been used to explore home buyers’ purchase decisions and
post-purchase satisfaction in an Asian context, but these methods are suitable for this
study.
Finally, the specific outcomes of this research are important to China – for home
buyers, housing builders/marketers, academic institutions and government, and they
also contribute to the body of knowledge. Consumers can apply the research results to
assess the relative importance of housing attributes and services that this research lists
and examines, to select the attributes and services which they perceive most valuable,
and then to make their purchase decisions. Marketers may learn more about how to
satisfy their consumers, and will then be in a position to develop strategies to respond
to the growth of the housing industry. This research could be used as an example of
7
marketing research, particularly for investigating two variables: housing attributes and
service quality. Governments may also use the outcomes of this research for policy
development. The research also attempts to contribute to the body of knowledge
relating to consumer purchase decisions by delving deeply into how home buyers
evaluate and select alternatives in terms of trade-offs among housing attributes and
services, and how these attributes affect their post-purchase satisfaction.
1.5 Research methodology

Quantitative methods were chosen for this research because the purchase decisions of
home buyers have been studied by previous researchers for many years, and results
are readily available from different contexts. Furthermore, the objective of this
research is to test the hypotheses, not to propose any new theory (Neuman, 2010).
Variables in this research are quantifiable and measurable (Creswell, 2009) and
generalisations can be made from samples of a population (Zikmund, Babin, Carr, &
Griffin, 2010).
The first step in this research was to conduct the literature review described in
Chapter 2 to gain background information, define the research problem, and develop
the hypotheses for further testing. This procedure included a review of the related
literature on factors influencing the purchase behaviour of residential home buyers
and also interviews with some experts who worked in Wuhan residential housing
companies to gather ideas and insights. This step provided a tentative understanding
of the research problem and was the foundation for the survey used in this research.
The next step was to conduct the survey. Details are given in the data analysis in
Chapter 4. The questionnaire (see Appendix 1) consisted of a written list of questions
with answers completed by respondents who were members of Wuhan residential
housing companies. The questionnaire consisted of two sections: home buyers’
opinions and background information. The first section was used to measure the
8
influence of a set of housing purchase factors on home buyers’ purchase decisions and
on home buyers’ post-purchase satisfaction. The second section was used to gather
demographic information on respondents.
The sampling strategy in this survey consisted of four steps: defining the target
population, selecting the sampling frame, selecting a sampling size and selecting the
sample design. The target population in this research consisted of potential home
buyers and house owners who lived in Wuhan. After the pilot study, 2000 revised
surveys were sent by mail to a sample of house owners and potential home buyers
who were members of Wuhan housing companies. All of the members were chosen by
employing a stratified random sampling procedure based on each of the 20 housing
companies’ member lists. One hundred participants were selected from each company
and 478 surveys were returned, yielding a response rate of 23.9 per cent.
The analysis of data was conducted based on the returned surveys. The SPSS 20.0
software was employed. Reliability and validity were tested. Afterwards, descriptive
statistics and inferential statistics were analysed. The following tests were selected for
testing the research hypotheses and addressing the research problem: principal
component analysis, logistic regression, multivariate analysis of variance (MANOVA)
and multiple linear regression. Details of these analyses are presented in Chapter 4.
1.6 Definition of terms

The definitions used in this thesis are presented here because the ways in which
terminology is used sometimes differ (Malhotra, 2010).
· The buying decision process or purchase decision process is defined as a series
of interrelated activities that leads to a choice between alternatives. Generally, the
decision-making process consists of five stages: problem recognition, searching
for information, evaluation of alternatives, purchase decision, and post-purchase
behaviour (Kotler & Keller, 2009).
9
· Consumer behaviour is defined as the ways in which individuals, groups, and
organisations select, buy, use, and dispose of goods, services, ideas, or experiences
to satisfy their needs and desires (Kotler & Keller, 2009).
· The exchange rate used in this research:
Table 1.1 Exchange rate
Exchange rate
RMB AUD
(by Bank of China, 20/01/2013)
654.70 100.00
Source: Adapted from Bank of China, 20/01/2013
· A home buyer is defined as a person who is in the process of buying a home. In

this research, home buyers have been defined as consumers (Colin Jones &
Watkins, 2009).
· Housing attributes include both intrinsic and extrinsic attributes. This study
identifies various intrinsic attributes and extrinsic housing attributes in Section
2.3.3.2.
· Housing suppliers in this research are defined as the people who provide housing
products and relative services to consumers. In this research housing suppliers are
considered to be housing developers, the two terms are used interchangeably.
· Housing products in this study include residential houses and the services
provided by housing suppliers (Bevans, 2009). The housing products are used for
residential purposes and only owner-occupied residences are considered in this
study. There are three main types of housing services provided by suppliers:
1. Maintenance: the work needed to keep or restore the building at an acceptable
10
level
2. Alterations: improvements to facilities which can make a building more suitable
for existing uses
3. Conversions: the provision of new facilities or rearrangements of internal space
to make the building suitable for a new type of use.
· A purchase decision is defined as occurring “when the buyer has paid for a
product or has made some financial commitment to buy some specified amount
during some specified time period. It is caused by intention to buy” (Quester,
Pettigrew, & Hawkins, 2011).
· Post-purchase satisfaction is assessed based on post-purchase behaviour. It is a

consumer’s judgement about whether the product or service matches or exceeds
its expected performance (Quester et al., 2011).
· Service quality provided by housing suppliers refers to the home buyer's

assessment of quality and focuses on all things that influence the home buyer's
perceptions of quality. It is a relative evaluation in that it will vary from one
customer to another. The five determinants of the quality of service are reliability,
responsiveness, assurance, empathy, and tangibles (Parasuraman, Zeithaml, &
Berry, 1993).
1.7 Delimitations of scope

There are three major delimitations in this study.
The first delimitation is: China’s current residential housing market is highly complex
and competitive. Many factors may stimulate home buyers’ purchase behaviour. For
example, Chinese government policy in recent years has been to protect home buyers’
profits, and housing prices have steadily increased in the past few years. Based on this
11
market situation, some home buyers make purchase decisions for investment purposes.
However, this study does not examine such purchase behaviour; it concentrates on the
housing product itself in order to investigate how home buyers evaluate alternatives in
terms of trade-offs among housing attributes and services, and consequently make
rational purchase decisions for residential purposes. Thus, this study only focuses on
housing attributes and the services provided by housing suppliers.
The second delimitation is that this study collects and analyses data from the Wuhan
housing market. Based on past literature, housing purchase behaviour varies across
different social and cultural backgrounds. The outcomes of this research are also
different to the results of past studies. Therefore, outcomes from this research might
not apply to other population groups, or to other cities in China.
Lastly, the consumer purchase decision model consists of five stages: problem
recognition, searching for information, evaluation of alternatives, purchase decision,
and post-purchase behaviour (Blackwell et al., 2006). This research model only
emphasises the last three stages of this CDM model. These three stages of the
consumer purchase decision process are: evaluating and selecting alternatives among
housing attributes and services, making the purchase decision, and assessing home
buyers’ post-purchase satisfaction.
1.8 Outline of the thesis

This thesis adopts the five-chapter format suggested by Perry (2011). The structure is
shown in Figure 1.3 (see next page).
Chapter 1 provides the background and objective to the research, the research
problem, the research questions and the research hypotheses. This is followed by the
justification for the research and a brief explanation of the methodology adopted.
12
Figure 1.3 Outline of the thesis
Chapter 1 Introduction of the research
Chapter 2 Literature review
Chapter 3 Research Methodology
Chapter 4 Analysis of data
Chapter 5 Conclusion and Implications
Chapter 2 presents a review of related literature in the two disciplines of consumer

behaviour and purchase decision-making processes in the purchase of residential
housing. This chapter also includes general background information on China and an
overview of China’s housing market. The research model and hypotheses are also
developed.
Chapter 3 describes methodological issues relating to empirical testing of the five

hypotheses. The chapter justifies the research paradigm, the research methodology,
the data collection methods and the sampling, and then explains the data analysis
procedure. In addition, ethical issues are discussed.
Chapter 4 analyses the collected data from the questionnaires using statistical methods,
which included descriptive statistics on respondents’ demographic information and
13
variables, and inferential statistics to test the research hypotheses. The findings are
then presented.
Chapter 5 concludes the thesis with findings, a statement of the contributions made by
the research and implications for policy and practice. Further research possibilities are
also discussed.
1.9 Summary
This chapter introduced the perspective of the study which aims to find out: What
residential housing attributes and services provided by housing suppliers could
influence home buyers’ purchase decisions in China? The background to this
research, the research problem, the research questions, the research hypotheses, and
the justification for the research were explained. Subsequently the research
methodology was outlined, followed by definitions of terms and delimitations of
scope. Finally, the structure of the thesis was presented. In brief, this chapter sets out
the foundations for this thesis. The next chapter provides a review of relevant
literature.
14
CHAPTER 2 LITERATURE REVIEW
2.1 Introduction
The purposes of this chapter are to clarify the research problem through a literature
review, to broaden the knowledge base of this research area, to develop a model for
examining the research problem and to present a justification for this research. The
chapter is divided into seven sections, as shown in Figure 2.1.
Figure 2.1 Outline of Chapter 2
2.1 Introduction
2.2 Parent theory : Consumer

behaviour and the purchase
decision-making process
2.3 Consumer choice in the 2.4 China’s residential housing

purchase of residential houses market
2.5 Research Justification
2.6 Research Problem:

Theoretical framework and
hypotheses
2.7 Conclusion
Section 2.1 presents the structure of Chapter 2. Section 2.2 reviews the core terms
linked to consumer behaviour and the purchase decision-making process. Section 2.3
15
reviews consumer choices for purchasing residential houses, relating them to housing
attributes and service quality. Section 2.4 presents a profile of China’s housing market.
Section 2.5 examines the housing attributes and service quality that influence home
buyers’ purchase decisions using a theoretical framework and describes the
development of the hypotheses. Section 2.6 presents the justification for this research.
Finally, the chapter is summarised in Section 2.7.
2.2 Parent theory: consumer behaviour and the

purchase decision-making process
This section explains consumer behaviour and the purchase decision-making process
in general. Since residential house purchase choices are influenced by consumer
behaviour, the definition of consumer behaviour is discussed, followed by a review of
models of consumer behaviour. Then, the purchase decision-making process is
presented. The section ends by detailing the major factors influencing consumer
purchase decisions. The structure of this parent theory is presented in Figure 2.2.
Figure 2.2 Outline of parent theory: consumer behaviour and purchase

decision-making
2.2 Parent Theory:

Consumer behaviour and
purchase decision-making
2.2.4 Major factors

2.2.1 Definition of 2.2.2 Models of 2.2.3 Purchase
influencing consumer
Consumer behaviour Consumer behaviour decision-making
purchase behaviour
16
2.2.1 Definition of consumer behaviour
The ability of a marketing manager to implement successful marketing strategies,

both domestically and globally, is always based on a thorough understanding of how
and why consumers decide whether to select and purchase particular products and
services, and what factors determine whether they are satisfied with those products
and services (Quester et al., 2011). This applies to all types of enterprises, non-profit
organisations and government agencies involved in regulating marketing activities.
The study of consumer behaviour is an unusually diverse discipline, and it has been
defined in a variety of ways in the marketing literature. Simply put, consumer
behaviours are “activities people undertake when obtaining, consuming and disposing
of products and services” (Blackwell, Miniard, & Engel, 2006, p. 4). Consumer
behaviour has also been defined as the study of how individuals, groups and
organisations select, buy, use and dispose of goods, services, ideas or experiences to
satisfy their needs and wants (Kotler & Keller, 2009, p. 150; Solomon, 2009, p. 7). An
alternative definition is: “consumer behaviour in seeking, purchasing, using,
evaluating and disposing of products and services that they expect to satisfy their
personal needs” (Schiffman, Hansen, & Kanuk, 2012, p. 5). A more broad and
complete definition is: consumer behaviour is “the totality of consumers’ decisions
with respect to the acquisition, consumption, and disposal of goods, services,
activities, experiences, people, and ideas by human decision-making units over time”
(Hoyer & Macinnis, 2010, p. 3). Table 2.1 (see next page) presents a summary of
previous researchers’ consumer behaviour definitions. In this research, consumer
behaviour is defined as the study of how individuals, groups, and organisations select,
buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs
and desires. A full understanding of decision-making processes helps marketers to
identify consumers’ wants and needs and helps them to develop successful market
strategies.
17
Table 2.1 Definitions of consumer behaviour
Definitions Sources
1. Activities people undertake when obtaining,

Blackwell, Miniard & Engel (2006, p. 4)
consuming and disposing of products and services
2. The study of how individuals groups, and
organisations select, buy, use, and dispose of

Kotler & Kelle (2008, p. 150); Solomon (2008, p.7)
goods, services, ideas, or experiences to satisfy their
needs and want.
3. Consumers’ behaviour in seeking, purchasing,
using, evaluating and disposing of products and

Schiffman & Hansen (2012, p.5)
services that they expect to satisfy their personal
needs.
4. Consumer behaviour reflects the totally of
consumers’ decisions with respect to the
acquisition, consumption, and disposal of goods, Hoyer & Macinnis (2010, p. 3)
services, activities, experiences, people, and ideas
by human decision-making units over time.

Some past studies have discussed home buyers’ purchase choices and have identified
that home buyers should be referred to as consumers in several consumption activities
such as choosing, buying and using housing products (Fierro et al., 2009; Huang & Yi,
2010; Opoku & Abdul-Muhmin, 2010). This study investigates purchase
decision-making and post-purchase satisfaction, and the researcher also identifies
home buyers as consumers.
Behaviour always occurs for the individual, in the context of groups and organisations.
Consumer behaviour involves the use and disposal of products as well as their
purchase; it involves services and ideas as well as tangible products (Schiffman et al.,
2012). Successful marketing managers are fully aware that consumer behaviour
18
should be the primary focus of every aspect of the company’s marketing program.
Marketing researchers’ efforts always focus on consumers’ consumption of goods,
services, time and ideas (Hoyer & Macinnis, 2010). The findings of research into
consumers’ purchasing decisions always respond to questions regarding what
consumers buy, where, when, why and how they buy, and how much they buy (Kotler
& Armstrong, 2009).
The next section presents the consumer behaviour model used in this research.
2.2.2 Model of consumer behaviour
Models of consumer behaviour are used to expound on the reasons a consumer

decides to buy a particular good or service (Quester et al., 2011). In general, a
consumer behaviour model is a view of how and why consumers have specific
behaviour patterns. A universally recognised consumer behaviour model is the
stimulus–response model shown in Figure 2.3 (see next page). Marketing and other
stimuli enter the consumer’s consciousness, and through a series of psychological
processes they combine with certain consumer characteristics, resulting in
decision-making processes and purchase decisions (Kotler & Keller, 2009).
The stimulus–response model has become a universal consumer behaviour model for
marketing managers. This model helps marketers to understand what happens in the
consumer’s consciousness between the arrival of the outside marketing stimuli and
their final purchase decision. The four key consumer psychological processes
(motivation, perception, learning, and memory) and consumers’ three types of
characteristics (cultural characteristics, social characteristics and personal
characteristics) fundamentally influence consumer response (Kotler & Keller, 2009).
19
Figure 2.3 The model of consumer behaviour
Consumer
Psychology
Buying Decision Purchase
Motivation
Process Decision
Marketing Perception
Other Stimuli
Stimuli
Learning Problem recognition Product choice
Products & services Economic Memory
Information Search Brand choice
Price Technological
Evaluation of Dealer choice
Distribution Political alternatives
Consumer Purchase amount
Communications Cultural Characteristics
Purchase decision
Purchase timing
Cultural Post-purchase
behaviour Payment method
Social
personal
Source: Adapted from Kotler and Keller 2009, p. 162
The five stages of the Buying Decision Process Model are: problem recognition,
searching for information, evaluating of alternatives, purchase decision, and
post-purchase behaviour (Blackwell, Souza, Taghian, Miniard, & Engel, 2006;
Quester et al., 2011; Schiffman et al., 2012; Solomon, 2009). In some theories, this
decision-making process is divided into two sections: the pre-purchase process and
the post-purchase decision-making process. The pre-purchase process comprises the
stages before consumers purchase products or services. It includes the following three
stages: problem recognition, searching for information, and evaluation of alternatives.
Post-purchase behaviour involves all the consumer’s activities and the experiences
that follow the purchase. These activities include post-purchase actions, post-purchase
satisfaction, post-purchase use and disposal of the products or services (Kotler &
Keller, 2009). The following sections explain each of the five stages of the purchase
decision-making process in detail.
20
2.2.3 Purchase decision-making process
Traditionally, consumer researchers have approached decision-making processes from

a rational perspective. The consumer decision-making process is defined as a series of
interrelated activities that lead to a choice between alternatives. Smart marketing
managers seek to fully understand the consumers’ decision-making process which
involves consumers’ experiences in studying, selecting, using, and even disposing of
products or services (Kotler & Keller, 2009). In the literature, marketing scholars
developed a ‘five stage model’ for the consumer purchase decision-making process as
shown in Figure 2.4. In theory, all of the following five stages will be experienced by
consumers in a purchase decision-making process: problem recognition, searching for
information, evaluation of alternatives, purchase decision, and post-purchase
behaviour. However, in some actual buying processes, consumers often do not pass
through all of these five stages. Consumer may skip or reverse some stages
(Blackwell, Miniard, & Engel, 2006; Kotler & Armstrong, 2009; Quester et al., 2011).
This thesis focuses on parts of the five-stage model to test the research hypotheses.
Figure 2.4 Five-stage purchase decision-making process

Post-
Problem Information Evaluation of Purchase
purchase
recognition search alternatives decision
behaviour
Source: Adapted from Hawkins, et al. 2011; Kotler & Keller 2009
Details of each stage are discussed below.
2.2.3.1 Problem recognition stage
In this five-stage purchase process model, the consumer process begins when the
buyer recognises a problem or need in response to internal or external stimuli. In this
stage, an individual recognises the existence of a difference between their desired
state and their actual state. When an individual recognises his or her real wants and
21
needs are beyond his or her perceived current feelings or situation level, the difference
may arouse a consumption desire, and activate the individual’s purchase
decision-making process (Bruner; Hawkins, Mothersbaugh, & Mookerjee, 2011). In
the problem recognition stage, the consumer decision-making process can be
stimulated if the desired state exceeds the actual state, and this can lead to products or
service acquisition and consumption. Alternatively, the consumer may not be
motivated to move to the next two pre-purchasing stages if problem recognition is not
stimulated in the problem recognition stage (Hoyer & Macinnis, 2010). Figure 2.5
presents the process of consumer problem recognition.
Figure 2.5 Problem recognition process
NATURE OF DISCREPANCY
Difference between the consumer’s desired and perceived conditions
No difference Desired state Actual state exceeds

exceeds actual state desired state
SATISFACTION PROBLEM RECOGINSED

No action Search decision initiated
Source: Adapted from Quester, Pettigrew, Hawkins 2011
Some past studies have examined the influence of market stimuli and consumers’
problem recognition on home buyers’ purchase decision-making. For example,
Rahman (2010) analysed the housing market in Australia and Fung, Jeng and Liu
(2010) examined the housing market in China. They found that Australia’s and
China’s economic growth were very much related to the housing sector and concluded
that the recognition of a need for better residential conditions and increasing housing
prices stimulated residents to purchase housing in both countries.
However, in some cases, the consumer may not be stimulated to proceed to the next
two pre-purchasing stages (searching for information and evaluating alternatives),
22
even if a large difference exists between the desired state and the actual state. This is
because there is also another factor that can influence the consumer’s desire to resolve
the particular problem. This factor is referred to as the relative importance of the
problem (Neal & Quester, 2007). Consumers may perceive the relative importance of
the problem to be small and decide not to enter the information search stage. All the
consumers’ purchase decisions are constrained by factors such as time, budget and
place, and relative importance becomes a critical concept for the consumer. Normally,
the level of importance is determined by how critical the problem is to the
maintenance of the consumer’s desired lifestyle (Quester et al., 2011). For example,
many studies point out that some house purchases are constrained by the consumer’s
current income compared to the house price. If home buyers have insufficient assets
to meet the minimum down payment their housing purchase process will not progress
to the information search stage, even if they recognise their living conditions should
be improved (Fierro et al., 2009).
2.2.3.2 Searching for information
After consumers recognise their problems, they have the motivation to activate the
knowledge stored in their memory and gather more information to find solutions.
Thus, the next step for the consumer is searching for information to reduce
uncertainty and the perceived risk to reach a buying decision (Hoyer & Macinnis,
2010). After consumers recognise a problem, they collect relevant information from
their long-term memories to determine whether a satisfactory solution is known. They
compare the characteristics of each solution, and finally identify what they consider to
be the best solution. The individual’s search of their personal memory is called an
internal search. If the appropriate solution cannot be achieved from the internal
search, consumers have to access the external search process (Schiffman et al., 2012).
Customers may search their own experience and memory for internal information in
regards to products or services. In addition, customers may engage in external
searches for more information (Blackwell, Souza, et al., 2006). Before a consumer
23
makes a purchase decision, in order to solve the problems they have identified he or
she may search the appropriate evaluative criteria and the characteristics of every
potential solution in relation to each evaluation criterion. The information search stage
ends when consumers find what they perceive to be the best solution. Usually,
searching for information occurs concurrently with the ‘evaluation of alternatives’
stage (Quester et al., 2011). Figure 2.6 shows the processes involved in the
information searches in consumer purchase decisions.
Figure 2.6 Information search process
What evaluative
Yes Information search
criteria are
terminates
needed?
What is the
performance
of each Can a
solution on decision be
each made?
evaluation
criterion?
What solutions Information search
No
exist continues
In general, consumers gather information from the following channels: personal

experience and memories; personal sources such as family members and friends;
independent sources like government agencies; marketing sources such as advertising
in newspapers and on television; and experiential sources such as product trials.
Widespread use of the internet has accelerated the flow of information between the
product market and consumers, so the stage of searching for information is
increasingly occurring online (East, Wright, & Vanhuel, 2008; Hawkins et al., 2011).
2.2.3.3 Evaluation of alternatives
The next step in the consumer’s purchase process is evaluating and selecting
alternatives. A very important definition for this stage is of evaluative criteria, which
24
are defined by Blackwell et al. as: ‘the standards and specifications used to compare
different products and brands’ (Blackwell, Miniard, et al., 2006). Evaluative criteria
are typically product and service characteristics or attributes associated by consumers
with either the benefits they desire or the costs they are willing to pay (Hawkins et al.,
2011; Webb, 2008). The evaluative criteria adopted by a consumer in a purchase
decision include factors such as product price, size, weight, quality, quantity, brand,
function, warranty, ease of use, after sales services and so on. In general, consumers
will have the following three goals in evaluating and selecting alternative processes.
Firstly, consumers intend to satisfy their real wants and needs; secondly, consumers
are looking for certain benefits from the product or service to solve a consumption
problem; and lastly, consumers view each product and its service as a bundle of
attributes with varying abilities for delivering the benefits sought to satisfy their real
wants and needs (Kotler & Keller, 2009). Customers may evaluate alternatives based
on how they will satisfy their needs, or they may be looking for a special benefit from
a product or service. Various factors may influence the evaluation of alternatives such
as lack of funds, product attributes, brand name and practical applicability (Hoyer &
Macinnis, 2010). Every consumer’s evaluation criteria and purchase decision rules
will be different, because consumers use their own memory and experience to select
products or services to meet their personal needs. Figure 2.7 (see next page) shows the
process for evaluation and selection of alternatives. The consumer determines which
criteria they will employ to evaluate a product or service, and they then compare each
alternative using each criterion. Finally, depending on the consumer’s individual
decision-making rules, they select the product or service which can best meet their
desires and needs.
Many past studies summarised home buyers’ decision rules and their selection criteria
and examined how consumers evaluated and selected alternative housing attributes
and made their final purchase decisions. For example, some of these studies conclude
that home buyers prefer to select those housing attributes which generate more
25
perceived value in their mind, and the have a willingness to pay for these housing
attributes (Greene & Ortuzar, 2002; Opoku & Abdul-Muhmin, 2010; Wang, 2011).
The discussion of these outcomes will be presented in Section 2.3.3.
Figure 2.7 Evaluating and selecting alternatives process
Evaluative
criteria
Evaluation of
Importance of Decision rules Alternative
alternatives using
criteria applied selected
each criterion
Alternatives
considered
Source: Adapted from Pettigrew, Hawkins 2011
2.2.3.4 Purchase decisions
In the evaluation stage, consumers form preferences from among the products in the
choice set. They may also form an intention to buy the most preferred product (Kotler
& Keller, 2009). A great deal of research, and the experiences of successful marketers,
provide clues to understanding how consumers decide to buy and where to buy
products. Figure 2.8 (see next page) shows the purchase decision-making process and
indicates how consumers decide whether and where to buy a product.
In reality, retail choice is often an interactive process in which type of outlet and
specific retailers affect each other. The process of selecting a specific product involves
matching consumer characteristics and purchase characteristics with retailer
characteristics. Individuals may adapt different criteria to evaluate which product can
best meet their need based on the type of purchase and how consumers anticipate each
will perform according to the various criteria (Blackwell, Souza, et al., 2006).
26
Consumers don’t always go through all the steps involved from the retail concept to
competitive retailers to specific shop choice; their past experiences and their preferred
brand sometimes enable consumers to make a choice immediately (Blackwell, Souza,
et al., 2006). In addition, consumers in different market segments might make
different purchase decisions based on their perceptions of the attributes they consider
important (Kotler & Armstrong, 2009).
Figure 2.8 Purchase decisions
Individual characteristics Purchase characteristics

Lifestyles Type of product
Economic variables Timing variables
Views of shopping situation Price/quality situation
Evaluating types of retailer

Evaluative criteria
Location
Nature and quality of Evaluating retail competitors
assortment
Price
Advertising and promotion
Store choice
Sales personnel
Services
Customer characteristics
Store atmosphere Purchase
Post-transaction service and
satisfaction
Outcome
Source: Adapted from Blackwell et al., 2006
2.2.3.5 The post-purchase process and customer satisfaction
As mentioned in Section 2.2.1, customer is generally used to refer to an individual

who usually buys products or services from a particular shop, source or company. A
consumer is involved in several consumption activities such as selecting, buying,
paying, and using products or services; a consumer always plays three roles in a
27
consumption process: buyer, user and payer, so it is a broad term for individuals who
use or consume products and services. So, the group of customers includes the group
of consumers.
Longenecker, Petty, Palich and Hoy (2010) state that customer satisfaction should be
considered as a post-purchase evaluation which includes multiple criteria such as
product attributes, performance and service. In the consumer behaviour discipline, the
consumers’ post-purchase processes produce customer satisfaction and consumer
loyalty (Quester et al., 2011). Figure 2.9 details consumer post-purchase behaviour as
a whole.
Figure 2.9 Consumer post-purchase behaviour
Purchase
Post-purchase
dissonance Non-use
Usage
Product disposal
Evaluation Complaint behaviour
Satisfaction
Loyal Repeat Increased Brand Discontinued

customers purchases use switching use
This figure demonstrates the series of critical activities that occur after consumers
complete their purchase behaviour. After consumers make a complex, relatively
28
long-term purchase decision, it is very common that they review this purchase
behaviour. Doubt and anxiety about the correctness of the purchase decision is
referred to as post-purchase dissonance (Quester et al., 2011). The main reason for
post-purchase dissonance is that when a consumer makes a relatively long-term
purchase decision in favour of a particular product or service, they also make abandon
alternatives despite their having attractive features (Jeffery Bray, Nick Johns, &
Kilburn, 2011; Needham, 2006). The product or service disposal process may occur
before, during or after product use. Five main disposal options available for
consumers are: sharing, exchanging, donating, recycling and ridding (Quester et al.,
2011). Afterwards, the next step of consumer post-purchase behaviour is purchase
evaluation which is influenced by post-purchase dissonance, product use and product
disposal. After the whole process, customer satisfaction and consumer loyalty may
result. Customer satisfaction is generated when the customer’s perceived product
performance matches or exceeds their minimum expectations. A satisfactory purchase
reduces the consumer’s perceived risk level for their next purchase decision and
encourages the consumer to repeat the same purchase behaviour in the future, thereby
increasing consumer loyalty. In contrast, dissatisfaction will cause consumers to
re-evaluate their purchase choice and will decrease the probability of similar product
or service purchases in the future (Schiffman et al., 2012; Solomon, 2009).
To successfully compete in the long term, a housing company must ensure current
home buyers are satisfied. Providing superior quality and keeping consumers satisfied
are rapidly becoming the ways companies differentiate themselves from competitors
(Kotler & Keller, 2009). For example, Torbica and Stroh (2001) investigated more
than 300 homeowners and 16 housing builders in Florida. They monitored home
buyers’ post-purchase behaviour and concluded that better service quality and better
overall housing conditions could increase consumers’ post-purchase satisfaction levels.
In another survey conducted in the USA, the findings identify better housing facility
quality and environmental quality as the main factors that influence home buyers to
29
purchase a house and satisfy their housing needs (Berkoz, Turk, & Kellekci, 2009;
Mossel & Valk, 2008; Saari & Tanskanen, 2011).
Customer satisfaction is generally defined as being a function of customer

expectations and perceived performance, or of perceived service quality (Oliver 1981,
1997 & 2010; Hill & Alexander 2006), and is thus a subjective evaluation of the
degree to which the customer’s expectations concerning a particular service encounter
are met (Mossel & Valk, 2008). In the marketing segment, the way for a successful
marketer to attract customers and beat competitors is to expend more effort on
meeting or exceeding customer expectations, building customer satisfaction and
creating loyal customers (Kolter & Keller 2009, p. 120). Customer satisfaction
encompasses four constructs: expectation, performance, disconfirmation and
satisfaction (Oliver, 2010), and customer expectation is the major factor in Figure
2.10, which plays the most important role in consumers’ assessments of their
satisfaction and dissatisfaction (Oliver, 1981, 1997 & 2010; Zeithaml, Parasuraman &
Berry, 1985 & 1988 ).
Figure 2.10 Components and relationships within the disconfirmation concept
Customer
expectation
Confirmation Satisfaction/
disconfirmation dissatisfaction
Perceived
performance
Source: Oliver 1981 & 1997, Zeithaml, Parasuraman,& Berry 1985 & 1988
Customer expectations are influenced by the value received from a product and the
product service encounter. The “expectancy disconfirmation with performance”
approach is widely used. This approach views customer satisfaction as the differrence
between pre-purchase expectations and perceptions of real performance. If customers
believe the product or service provider performs better than expected, disconfirmation
30
has a positive influence on satisfaction; conversely, if perceived performance falls
short of expectations, disconfirmation has a negative impact on satisfaction (Oliver,
1981 & 1997; Peter & Olson, 2009; Mossel & Valk, 2008).
Measuring customer satisfaction/dissatisfaction

Either attribute (multi-item) or aggregate (single-item) levels of measurement are
employed to measure customer satisfaction/dissatisfaction in the literature. An
attribute level measures customer satisfaction/dissatisfaction by evaluating attributes
on several dimensions, and an aggregate level only uses the information in an overall
level to measure customer satisfaction/dissatisfaction (Matzler, Bailom, Hinterhuber,
Renzl, & Pichler, 2004; Mittal, William & Baldasare, 1998). This research uses the
aggregate level to measure overall customer satisfaction/ dissatisfaction.
This section has reviewed consumer purchase decision-making processes. In addition,

the relevant theory of customer satisfaction has also been presented. The major factors
influencing the consumer decision-making process are discussed in the next section.
2.2.4 Major factors influencing consumer purchase

decision-making
According to Kotler and Keller’s (2009) consumer behaviour model, four

psychological processes, motivation, perception, learning and memory, fundamentally
influence consumer response, and consumer characteristics which include cultural
factors, social factors and personal factors influence consumer purchase behaviour. A
more detailed summary based on the work of Blackwell et al. (2006) and Quester,
Pettigrew and Hawkins (2011) demonstrates that factors affecting consumer purchase
decision processes include individual differences and environmental influences.
Figure 2.11 (see next page) below presents the major factors influencing consumer
purchase behaviour.
31
All of the individual and environmental factors exert impacts on all five stages of the
consumer purchase decision-making process: problem recognition, searching for
information, evaluation of alternatives, purchase decision and post-purchase
behaviour. The individual factors which have an impact on consumer purchase
behaviour include consumer demographics, personality and lifestyle, motivation,
knowledge, and attitudes. Culture, social class, family and household, group and
personal factors are environmental variables which influence consumer purchase
behaviour. Each of these factors is explained in the following sections.
Figure 2.11 Factors influencing on consumer purchase behaviour
Individual Differences
Marketing Stimuli
Demographics
Products & services Personality and lifestyle
Motivation
Price Knowledge
Buying Decision Process
Intention, attitudes,
Distribution beliefs and feelings
Problem recognition
Communications
Information Search
Other Stimuli Evaluation of alternatives
Economic Purchase decision

Environmental
influences Post-purchase behaviour
Technological
Culture, ethnicity, and
Political
social class
Family and household
Cultural
Group and personal
Source: Adapted from Blackwell et al. (2006) and Kotler & Keller (2008)
2.2.4.1 Individual Influence
Individual factors – also called internal factors, are the consumers’ psychological
processes that affect consumer behaviour in acquiring, obtaining, consuming and
disposing of products and services. Individual influences include consumer
demographics, personality, lifestyle, motivation, knowledge, intention, attitudes,
32
beliefs and feelings (Blackwell, Miniard, et al., 2006; Schiffman et al., 2012). Details
of each factor are examined below.
1) Demographics
A series of important determinants of consumers’ demand for products or services are
consumers’ personal characteristics, which include their demographic particulars,
lifestyles and personalities (Blackwell, Souza, et al., 2006).
“Demographics is interested in any population characteristic that might be useful in

understanding what people think, what they are willing to buy, and how many fit this
profile” (Zikmund & Babin, 2009). Demographic variables are easier to measure than
other variables in a research paper and consumers’ demands closely reflect
demographic variables. Demographic variables include age, gender, education,
income, occupation, family structure, social class and religion. The concept of market
segment always aims to adjust for differences in consumers’ needs and adjusts
products to meet and satisfy different groups of consumers (Hoyer & Macinnis, 2010).
With regard to consumer purchase behaviour, some researchers examine a range of
demographic characteristics that may be associated with needs and wants of
consumers in segment markets.
2) Personality and lifestyle

Personality in consumer studies, context is defined as an individual’s unique,
consistent responses to environmental stimuli. An individual’s psychological character
can influence their responses to the environment. Personal traits can be used by
marketers to analyse consumer purchase choice processes because personal traits are
common to many individuals and vary in absolute amounts among individuals (Kotler
& Keller, 2009).
Personal values indicate what are important in an individual’s life. These values can
33
reflect the consumer’s purchase choice bias, which is influenced by the various social
values to which that individual is exposed. Personal values influence the individual’s
need recognition stage, and also affect consumers’ evaluative criteria (Blackwell,
Souza, et al., 2006). In the housing decision-making process, home buyers’ personal
values influence the attribute selection criteria (Greene, Margarita, & Ortuzar, Juan
De Dios, 2002).
A lifestyle is a pattern of an individual living in the world, including how the

individual expends time and money in social activities, and expresses their interests
and opinions (East et al., 2008). Individuals use their personal lifestyles to interpret
the events happening around them, and to interpret, conceptualise and predict events.
A consumer’s purchase decision processes generally fit with their lifestyle and are
appropriate for the price level the consumer can afford (Kotler & Armstrong, 2009).
3) Motivation
Motivation concerns why an individual does what he or she does. A consumer’s
motivation begins when a need is aroused, and then the motivated consumer is ready
and willing to engage in the purchase process and they attempt to satisfy their
physiological and psychological needs (Hawkins et al., 2011). The different needs of
different consumers lead them to look for different products or services. Different
consumer motivations attach to a variety of needs and affect how consumers evaluate
and select products or services. Marketers try to understand consumers’ motivations to
appreciate their demand characteristics (Hawkins et al., 2011).
4) Knowledge
Knowledge is the information stored in a consumer’s memory which is used to guide
consumers to evaluate and select products or services (Schiffman et al., 2012).
Consumer knowledge includes a wide range of information sources in the consumer’s
memory, such as product attributes and associations, various pieces of information
34
related to the consumer’s buying process (when, where to buy), how products or
services can be consumed and used, and so on.
5) Intention, attitudes, beliefs and feelings

In consumer psychology there are always some internal relationships between these
four psychological factors. Before a consumer forms an intention to purchase a
product or service, their first step is to judge the strength of their beliefs about the
item. The consumer then forms an attitude towards the product or service, and lastly,
makes a purchase decision about it. After making the payment, he/she will undergo
the consumption experience. These four psychological factors influence consumers’
decision-making processes (Blackwell, Souza, et al., 2006).
Thus, consumer demographics, personality, lifestyle, motivation, knowledge,

intention, attitudes, beliefs and feelings, are all individual factors which exert an
impact on consumers’ purchase behaviours. The next section discusses environmental
variables influencing the consumer buying process.
2.2.4.2 Environmental influences
Environmental factors consist of culture, ethnicity, social class, family, household,

group and personal influences.
1) Culture, ethnicity, and social class,
Culture
Culture represents influences that are imposed on the consumer by other individuals.
Culture is everything the individual learns and shares with other members in a society,
and it is a complex whole that includes knowledge, ideas, normalcy, values, beliefs,
arts, and any other capabilities and behaviours acquired by a person as a member of a
society (Lantos, 2011). Culture affects all five stages of the purchase process (need
recognition, search, alternative evaluation, purchase decision and post-purchase
behaviour) in various ways.
35
Ethnic micro-cultures
People define themselves and others by using ethnic labels. In a consumer context,
ethnicity is best defined as some combination of the strength and weakness of the
affiliations that people have with an ethnic group. People who belong to the same
ethnic group share common knowledge and culture, and they may have similar
personal perceptions. People living in different ethnic groups always have different
cultural backgrounds and lifestyles, which may lead them have different consumer
behaviours (Blackwell, Souza, et al., 2006).
Social class
Social classes are relatively permanent and homogeneous divisions in a society, with
members (including individuals or families) of a class sharing similar economic
positions, wealth, status, values, lifestyles, interests, education and behaviour.
Occupation, personal performance, personal interactions, possessions, value
orientation, and class consciousness determine an individual’s social class. Education,
occupational prestige and income are the main achievement-based status dimensions
that determine an individual’s social standing. The distinctions between social classes
cause differences in patterns of consumption behaviour, and have a noticeable impact
on the ‘evaluation of alternatives’ stage of consumer purchase decision-making
(Quester et al., 2011; Solomon, 2009).
2) Family and household influences

The family or household is the basic consumption unit for many consumer products or
services, and consumer purchase decisions are significantly influenced by the roles of
various family members in the purchase and consumption of products. These
decisions also affect other family members (Blackwell, Souza, et al., 2006). Some
demographic dimensions of a population relate to family and household structure such
as age, the head of households, marital status, employment situation, number of
children and family size. These dimensions affect families’ and households’ purchase
36
decisions. Individual family members play different roles and have different amounts
of influence on each stage of purchase decision-making processes (Solomon, 2009).
Product category is closely related to the identity of the user of the product and
sometimes product category is an indicator of the type of decision-making that takes
place in the household (husband-dominant decision-making, wife-dominant decision-
making, or autonomic decision-making) (Pride & Ferrell 2011, pp. 135; Hoyer &
Macinnis 2010, pp. 351). Negotiation or compromise always help family members to
solve purchase conflicts.
3) Group and personal influence

Group influence
A reference group is any group of people with whom individuals compare themselves
for guidance in developing their own values, attitudes, knowledge and behaviour
(Hoyer & Macinnis 2010, pp. 392). Kolter and Keller (2008) classify reference groups
into primary groups and secondary groups. Primary groups are those with whom the
person interacts fairly continuously and informally. They include family, friends,
neighbours, and co-workers. Secondary groups are people with religious, professional,
and trade-union associations. They tend to be more formal but less comprehensive
and less influential in shaping thought and behaviour.
Reference groups create individuals’ socialisation and force individuals recognise

what behaviour is more likely to result in stability for the whole social group.
Reference groups are also important in helping individuals to protect and modify their
self-concept in their interactions. Lastly, reference groups influence individuals to
comply with norms in a society (Blackwell, Miniard, et al., 2006).
Personal influence
Individuals belong to several groups and they are expected to adapt the group’s values,
beliefs, and norms. This leads consumers to behave in predetermined ways. According
to Blackwell et al. (2006), word-of-mouth communication (the informal transmissions
37
of ideas, comments, opinions, and information between two people) and the opinions
of leaders are the two main personal factors which have a significant influence on
individuals’ behaviour.
2.3 Consumer choice in the purchase of residential

houses
The theory of consumer choice in the purchase of residential houses is concerned with
the global housing market, the widely marketed products and services of the housing
industry and explains how consumers make residential housing purchase decisions.
Section 2.3.1 of the literature review commences with a brief overview of the global
housing market, and the thesis introduces various housing products and services in
Section 2.3.2. Details of housing attributes and how consumers make a residential
housing purchase choice are discussed in Section 2.3.3, and consumer decision
processes regarding housing service quality are explained in Section 2.3.4. The
structure of this outline is presented in Figure 2.12.
Figure 2.12 Outline of housing purchase choice theory
2.3 Consumer Choice on

purchasing housing
2.3.1 Introduction of global

housing market
2.3.2 Housing products and

services
2.3.3 Consumer housing 2.3.4 Quality of housing

purchase choice services
38
2.3.1 Introduction of global housing market
A brief review of the global housing market is presented to enable a better

understanding of China’s housing market, as the performance of China’s housing
market will be compared to global characteristics and benchmarks in later sections.
2.3.1.1 Definition of housing market
Jones and Watkins (2009) state that the general housing market can be defined as
trade between housing buyers and sellers, either direct sales by owners or indirect
sales through brokers. Companies that are engaged in housing ownership,
management and/or development have generated huge revenues. The concept of the
housing market as defined by Priemus (1984) is widely adopted by scholars.
According to Priemus (1984) the housing market has three parts: the dwellings trading
market, the rental housing market and the housing services provided by rental housing
suppliers. See Figure 2.13 below.
Figure 2.13 The composition of the housing market
dwellings trading market
Housing services
Housing Market
provided by suppliers
Rented housing market
Source: Adapted from Priemus, 1984
This thesis aims to investigate the residential housing market in China, which
comprises the housing trading market and the services provided by rental housing
suppliers in the housing trading market.
39
2.3.1.2 Development of the global real estate market
The housing market is a part of real estate market, and is significantly influenced by
the whole real estate market. An understanding of the real estate market helps us to
understand the housing market more thoroughly.
The real estate market is defined as: “the interaction of individuals who exchange real
property rights for other assets, such as money” (Kahr & Thomsett, 2005, p. 217).
And specific real estate markets can be defined on “the basis of property type,
location, income-producing potential, typical investor characteristics, typical tenant
characteristics, or other attributes recognized by those participating in the exchange of
real property” ( Kahr & Thomsett, 2005, p. 217). The real estate industry worldwide
continued to grow in the five-year period from 2004 to 2008, and generated a total
capitalisation of US$501.60 billion. The American and European industry groups
reached values of US$175.80 billion and US$180.40 billion respectively in 2008. The
residential sector was the industry's most lucrative in 2008, generating total revenues
of US$287.10 billion, equivalent to 57.20 per cent of overall value (Datamonitor,
2010). However, after this prosperous period America’s housing bubble burst at the
end of 2008. Any collapse of America’s housing market has a direct negative impact
not only on home valuations, but on the nation's mortgage markets, residential house
builders, employment rate, and home supply retail outlets. The decline in the US
housing market also had a significant negative influence on the worldwide housing
market, especially the European housing market (Byun, 2010; Hendershott,
Hendershott, & Shilling, 2009; Martin, 2011).
The real estate industry attracts a wide range of investors including domestic, foreign
institutional and individual investors (Eldred, 2009). The real estate industry was once
dominated by local entrepreneurs but in the past two decades, commercial real estate
has become an increasingly global business as investors search across national
40
borders for enhanced returns and diversification (Murray & Brown, 2006). In the
period from 2002 to 2006, cross-border investments tripled to US$116 billion at the
end of 2006, and the cross-border investment amounts reached 20 per cent of all
property investment worldwide (Hobbs, Chin, Tpointzi, & Keng, 2007). At the end of
2006, the global real estate investment market was dominated by the North American
real estate market, which remained the largest real estate investment destination, with
investment of US$216 billion in 2006, nearly half of total global transaction volumes.
The Asia-Pacific was the fastest-growing market area, with investment growing 46
per cent to US$68 billion in 2006 (Murray & Brown, 2006). Worldwide, investors
faced property decline risks which started at the end of 2008. As a result, the total
global real estate investment fell to its lowest point 2009, and amounted to US$209
billion in that year. However, according to a report by Jones Lang Lasalle (2011) and
statistical data from Datamonitor (2011), the worldwide total investment in the real
estate industry recovered in 2010, with an average increase rate of 35% in 2010 and
2011. The market was worth approximately US$316 billion in 2010 and US$379
billion in 2011.
2.3.1.3 A brief introduction to international housing market
development
A quick overview of the global housing market is now presented.
The instability of the European housing market

The European housing market has experienced a huge shake-up in the past several
years. Although the housing market has also become an integral part of the European
economic infrastructure, after a long period of boom in most European countries,
gloom spread to all of Europe’s housing markets in 2008 (Ball, 2010). This decline,
was caused by the European economic recession, and it saw a decline of two per cent
overall and 2.8 per cent in the UK by during 2008 (RICS, 2009). However, a housing
market recovery has occurred slowly in the majority of European countries since 2009.
41
Due to the previous boom and the European financial crisis, currently housing market
has not reached an equilibrium point, and the market is not expected to reach a more
stable state for a long time (Ball, 2011).
The boost of the Asian housing market

The Asian housing market has experienced a remarkable upward trend since the 1990s,
despite the two financial crises in Asia in last two decades. In China, housing prices in
March 2010 had risen by no less than 67 per cent compared to January 2007.
Although house price bubbles burst in many OECD (Organisation for Economic
Co-operation and Development) countries, housing prices rose in major countries of
Asia because of the large demand for residential houses and the continued expansion
of the market. The housing market is currently overvalued in China, Japan, Singapore
and Hong Kong, and the risk of a downward adjustment has obviously risen in these
markets. However, this is not the situation throughout all of Asia, and overvaluation
and downside risk is not present in the Malaysian, Indonesian and Korean housing
markets which have remained stable because there is a balance between residential
house supply and demand (Dyck & Just, 2010).
Although housing market in some countries has been unstable in the past few years
and needs more time to reach a stable footing, it has still been considered to be the
attractive to investors and is expected to gradually become an integral part of the
fundamental economy in many developed and developing countries (Ball, 2010 &
2011; Nenova, 2010; Wilson & McDonald, 2011).
2.3.2 Housing products and services
Ownership or rental of residential houses has always been considered by most people
to be one of the central tenets of high living standards. Purchasing or renting an
adequate house is gradually becoming an integral part of society all over the world,
and it is seldom doubted that the value of an adequate residential house for individuals
42
and families is very large. Usually, houses are the largest single asset of most
households and provides residents with personal security, independence and privacy
(Rahman, 2010). As housing plays an important role in people’s daily lives, prior to
discussing consumers’ housing purchase behaviour, this section introduces the various
housing products and services available.
Various housing products

According to Real Estate and Property Law, there are three main types of housing
products in most western countries: single family homes, townhouses and
condominiums (Bevans, 2009). A single family house is one that is located on its own
piece of land, and is not attached to anyone else's residence. The total space of the
house is the householder’s own, and householders can modify or improve their houses
as they wish. A townhouse is midway between a single family house and a
condominium. It also sits on a parcel of land which the householder owns, but it is
always attached to one or more other houses. So, persons who live in a townhouse
have less personal privacy than experienced in a single family home. When each
homeowner owns their individual unit space in a group of housing units, these
individual units are called condominiums (apartments are the most common types of
condominiums). The individual dwellings share ownership of common areas and
amenities such as exterior structures (car parking, exterior walls, rooftop etc.), pools,
playgrounds and clubhouses with other people (Kimmons, 2011).
Housing service provided by the marketer

Priemus (1984) divides the housing market into three parts: the dwellings trading
market, the housing service market, and the rented housing market. He divides the
housing service market into the mobile housing market and the immobile housing
market. Based on Priemus’s (1984) study, Lee, Reginald and Wordsworth (2001)
identify the following three construction service activities available to housing buyers
in the residential housing market:
43
1. Maintenance: the work necessary to keep or restore the building to the acceptable
level
2. Alterations: work to improve facilities which can make buildings more suitable for
existing use
3. Conversions: work to provide new facilities or rearrange internal spaces to make
buildings suitable for new functional use.
This section has summarised the various house products and services; and Section
2.3.3 tries to explain consumer housing purchase behaviour.
2.3.3 Consumer housing purchase choice
Housing is extremely important to all people. Shelter is a fundamental need, and

home ownership has been considered as one of the key elements of high living
standards. Home ownership provides security, independence and privacy. Residents
place a high degree of importance on home ownership which is perceived as
important for the stability of family life and for wealth creation (Rahman, 2010).
Meanwhile, a house is considered as the largest single asset owned by most
households, and a house is a high-involvement product for residents (Jones & Watkins,
2009). Thus, the importance of acquiring an appropriate house is strongly emphasised
in many societies.
The number of house buyers has steadily increased in recent years and they rely on
the market to satisfy their housing needs. Generally, the kind of housing choice a
person makes determines how they perceive the value of the house. With the
increasing freedom consumers have in choosing their houses, variations in all aspects
of housing consumption have increased. An examination of house buyers’ housing
preferences is crucial for understanding these variations. Consumers’ housing
purchase decisions involve the individual consumer’s real needs and wants as well as
a complex interplay of housing attributes or other housing purchase factors (Bitter,
44
Mulligan, & Dall'erba, 2007; Hays & Kogl, 2007; Hofman, Halman, & Ion, 2006;
Opoku & Abdul-Muhmin, 2010; Pope, 2008).
2.3.3.1 Hedonic model of housing
In previous academic studies, many researchers have sought to understand how

consumers make their housing purchase decisions. In examining consumers’ housing
selection criteria, many previous studies have adopted the hedonic price framework
developed by Rosen (1974) to analyse the demand for housing amenities and
attributes (e.g. Bitter, Mulligan & Dall’erba, 2007; Taylor, 2008; Fierro, Fullerton &
Donjuan-Callejo, 2009; Steimetz, 2010). The premise of these studies is that
consumers choose their houses by equating the marginal utility of each house attribute
to its marginal price. The hedonic modelling approach is widely employed by
numerous organisations, including the United States Census Bureau in its quarterly
housing market analysis. Rosen (1974) argues that “a class of differentiated products
is completely described by a vector of objectively measured characteristics”. He
defines hedonic prices as the “implicit prices of attributes and are revealed to
economic agents from observed price of differentiated products and the specific
amounts of characteristics associated with them”, and the prices are estimated
through a hedonic regression. Rosen (1974) defines the price of the product as “at
each point on the plane and guides both consumer and producer locational choices
regarding packages of characteristics bought and sold”. In his opinion, all the
commodities provided by producers at every point on the plane must equal amounts
demanded by the consumers choosing to locate there. Both consumers and producers
base their locational and quantity decisions on maximising behaviour, and the
product’s equilibrium price is determined by the distributions of consumer tastes and
producer costs, so that consumers’ needs and producers’ costs are perfectly matched.
The hedonic model assumes that there is a series of equations regarding the price of a
product’s attributes, and consumers’ selection criteria are used to equate the marginal
utility of each attribute to its marginal price (Rosen, 1974).
45
Rosen (1974) uses a two-step approach to estimate the product price, and his hedonic
price regression is:
P  f (Z ) (1)
In this equation, P is the price of the resident’s house, and Z is the vector of the house
attributes or other purchase factors. The implicit prices of attributes are generated by
evaluating P / Zi . The implicit prices of attributes are then used as endogenous
variables in the second-stage joint estimation of the set of n equation for n attributes
P / Z1  g1 (Z , Y ) (2)
. . .
. . .
. . .
P / Zn  gn (Z , Y )
where Y is the vector of exogenous shift variables.
This two-step approach assumes that the value of the house is significantly influenced
by the value of housing attributes or characteristics or other housing purchase factors.
Based on this theory, many academic studies see a house as a product which is valued
for its utility-bearing attributes or characteristics or other housing purchase factors. In
order to perfectly match the consumer’s needs and the producer’s costs, the house’s
equilibrium price is determined by the distributions of consumer tastes and producer
costs (Bao & Wan, 2007; Farmer & Lipscomb, 2010; Sunding & Swoboda, 2010).
This thesis concentrates on consumers and investigates the most important housing
attributes and services that influence consumers’ housing purchase choices. In other
words, this study focuses on finding out which housing attributes can generate more
perceived value than other attributes and stimulate consumers’ willingness to pay for
these attributes, and to make a purchase decision based on these desirable housing
attributes. Rational consumers are assumed to be utility maximzing,, within the
bounds of search costs and limited knowledge, mobility, and income (Kotler &
46
Armstrong, 2009). They estimate which offer will deliver the most perceived value
and make purchase decisions based on this estimate (Blackwell, Miniard, et al., 2006;
Hawkins et al., 2011; Solomon, 2009). Unlike most previous studies, this study
considers housing price as one of many purchase factors. The price of residential
housing has been included as one of the house’s intrinsic attributes (see Section
2.3.3.2) in this research. The next section details the various housing attributes and
explains how these purchase factors influence consumers’ housing choices.
2.3.3.2 Identification of housing attributes
The number of options available to consumers is very large, but consumers cannot be
aware of all the available options in their purchase decisions. Evaluative criteria are
typically product features or attributes associated by consumers with the benefits they
desire (Hawkins et al., 2011). Consumers tend to identify the major attributes of the
product which they perceive as the most valuable, rate the importance of these
different attributes, and then assess their willingness to pay for these desirable
attributes (Kotler & Armstrong, 2009; Kotler & Keller, 2009). Numerous specific
housing attributes and structural amenities have been suggested in many previous
papers as influencing consumers’ housing purchase choices. The first step to finding
the relative importance of housing attributes for house buyers is to identify these
housing attributes. In previous research, researchers use several methods to identify
housing attributes. The most common methods for identifying housing attributes are:
an exploratory study which applies a survey to experts in the social housing field (or
depth interviews with experts in the social housing field); or a series of focus group
interviews and discussion about the most significant housing situations. According to
past literature, these identified main housing attributes can be put into two categories:
intrinsic housing attributes and extrinsic housing attributes. Intrinsic housing
attributes include housing size, housing type, internal house design and so on
(Cupchik, Ritterfeld, & Levin, 2003; Dale-Johnson & Phillips, 1984; Greene &
Ortuzar, 2002). There are three types of extrinsic attributes: 1) exterior design and
47
exterior space (Bhatti & Church, 2004); 2) environmental attributes such as
neighbourhood (Cheshire & Sheppard, 1995; Fierro et al., 2009; Pasha & Butt, 1996)
and pollution (Yusuf & Resosudarmo, 2009; Zabel & Kiel, 2000); and 3) location
facilities and services such as the distance to the nearest central business district,
schools, and transport (Chay & Greenstone, 2005; Pasha & Butt, 1996a; Pope, 2008).
The details of housing attributes identified in the literature are discussed below and
summarised in Table 2.2.
Table 2.2 Intrinsic housing attributes and extrinsic housing attributes
Intrinsic attributes Extrinsic attributes
Exterior design and
Environmental attributes Location attributes
space
• housing types • appearance of the house • environmental pollution • schools and nurseries
• housing age • type of finishing • danger focus • health centre and hospital
• building materials • quality of finishing • air pollution • shopping centres
• plot size of the house • the presence of garden • open space • food courts
• living room • the function of a garden • greenery • sports facilities
• dining room • roof • security • library
• bedrooms • external walls • cultural characteristics • social activities centres
• bathroom • external floors • street lighting • church
• patio • exterior space • noise • public transport
• balcony • pollution • refuse collection
• internal layout • rain water drainage • public phone
• area per person • footpaths • other community services
• air conditioning • road and passages width • downtown area
• patio • layout of the street • main street
• fencing • geographic aspects
• housing price
Source: Developed for this research based on literature
Intrinsic housing attributes

Intrinsic housing attributes are considered to be the most important part of the housing
product. These attributes include housing type, housing age at the time of transaction
(years), materials the house is made of, plot size, living room, dining room and
kitchen, total bedrooms in the house, numbers of bathrooms, patio, balcony, internal
layout, style of the house, overall condition and others. Dale-Johnson and Phillips
(1984) identify lot size, number of bedrooms, number of bathrooms, square footage of
48
living space, year built, number of fireplaces and the internal condition as intrinsic
housing attributes. Greene and Ortu´zar (2002) used a Delphi Survey to identify
housing attributes, and they identify housing independent variables and house design
as intrinsic housing attributes. Housing independent variables include plot size, area
per person, household complexity, families in site, rooms per person, patio and
fencing. House design includes growth capacity, flexibility, symbolic aspects, internal
layout and housing typology. Bitter, Mulligan and Dall’erba (2007) add two more
intrinsic housing attributes: the presence of refrigerated air conditioning, and the
presence of a garage on the property. House type is a more extensive variable and
contributes to the identification of intrinsic housing attributes (Opoku &
Abdul-Muhmin, 2010). In addition, some past studies regarding home buyers’
purchase choices identified housing price and payment methods as intrinsic housing
attributes (e.g. Pasha & Butt, 1996; Opoku & Abdul-Muhmin 2010). Thus, as
discussed earlier, housing price has been included as one intrinsic housing attribute in
this research.
Extrinsic housing attributes

Many previous studies have identified a range of extrinsic housing attributes. These
studies concluded that extrinsic housing attributes could be divided into three
categories: housing exterior design and space, environmental attributes and location
attributes.
1) Housing exterior design and space

Based on past studies, only a few exterior attributes are believed to influence
consumers’ housing purchase choices. These attributes can be roughly divided into
two types: exterior design and exterior space. Exterior design includes the appearance
of the house, type of finish, quality of finish, the presence of a garden, the function of
the garden, the type and the quality of roof, external walls and external floors.
Exterior space refers to size of garden and size and the type of public area (such as
49
swimming pool, recreation room, public kitchen, game room) (Bhatti & Church,
2004; Greene & Ortuzar, 2002; Opoku & Abdul-Muhmin, 2010; Pasha & Butt, 1996,
1996).
2) Environmental attributes
Besides house characteristics, many residents are also concerned with other extrinsic
factors which affect their houses. Thus, many researchers attach importance to
identifying these factors. The attributes of the environment around the residential
house are mentioned most frequently in recent studies. The housing environment
includes a very wide range of attributes, such as neighbourhood characteristics, time
in neighbourhood (Arimah, 1997; Cheshire & Sheppard, 1995; Fierro et al., 2009;
Pasha & Butt, 1996) environmental pollution, danger focus, air pollution, open space,
greenery, security, cultural characteristics of the environment, street lighting, noise,
pollution, rain water drainage, footpaths, width of roads and pavements, orientation,
layout of the street and geographic aspect (Ekeland, Heckman, & Nesheim, 2004;
Rojas & Greene, 1995).
3) Location attributes
In modern society, everyday convenience is considered very important, and it drives
people’s willingness to pay for access to the location’s facilities and services.
Facilities and services are two more types of extrinsic factors. Facilities include:
downtown area, main street, schools and nurseries, health centres and hospitals,
shopping centres, food courts, sports facilities, libraries, social activity centres,
churches and so on. Location services include public transport, refuse collection,
public phone and other community services (Fierro et al., 2009; Greene & Ortuzar,
2002; Yusuf & Resosudarmo, 2009; Zabel & Kiel, 2000).
Section 2.3.3.2 detailed numerous housing attributes which have been identified by
previous studies. This helped the researcher to determine which housing attributes
50
will be considered in this research. Consumers’ housing choice behaviour across
national contexts is explained in Section 2.3.3.3.
2.3.3.3 Consumer housing choice decisions
A number of studies have discussed consumers’ housing preferences and related

issues. The evaluation of housing attributes has been conducted for numerous
international metropolitan markets (in both developing countries’ markets and
developed countries’ markets). The markets investigated in previous research have
been in China (Wang & Li, 2004 & 2006); Japan (Seko & Sumita, 2007); Northern
Mexico (Fierro, Fullerton & Donjuan-Callejo 2009), the United States (Chay &
Greenstone, 2005), Sweden (Brownstone & Englund, 1991; Wilhelmsson, 2002),
Ghana (Tipple & Willis, 1991), Chile (Greene & Ortuzar, 2002), Madrid and
Barcelona (Alonso, 2002). Table 2.3 (see next page) summarises the literature
regarding the influence of housing attributes on home buyers’ purchase behaviour
across national contexts.
As discussed in Section 2.2.3, in the “evaluation of alternatives” stage of the purchase

decision process, Rational consumers are assumed to be utility maximzing, within the
bounds of search costs and limited knowledge, mobility, and income. They estimate
which offer will deliver the most perceived value and base their purchase decisions on
this estimate.
Consumer perceived value is the difference between the prospective consumer’s

evaluation of all the benefits (including image, personnel, services, product benefits)
and all the cost of an offering (including psychological, energy, time and monetary
costs) and the perceived alternatives (Koller, Floh, & Zauner, 2011; Kotler &
Armstrong, 2009). Thus, consumers intend to search, select and purchase the housing
attributes which they perceive to be the most valuable or which offer most benefits to
51
Table 2.3 Home buyers’ preferences across country contexts
Country Author Methods Findings
Exterior design and exterior space are very important
British Bhatti & Church( 2004) Qualitative
for home buyers making purchase in the modern U.K.
Location of amenities impacts home buyers purchase
British Cheshire & Sheppard (1995) Quantitative
decisions
Spetic, Kozak & Cohen Home buyers have the willingness to pay for healthy
Canada Quantitative
(2005) living attributes
Type of dwelling and building material appear as the

Mixed strongest important variables. The location of the
Chile Greene & Ortu´zar (2002)
method building is least important attribute; price and size
do not appear in general as important attributes.
Neighbourhood attributes and location attributes are

more important than intrinsic dwelling attributes,
China Wang & Li (2006) Quantitative
financial considerations are very important for home
buyer to purchase
Low-income households appear to place a great deal

Egypt and the Philippines Daniere (1994) Quantitative of value on locations which are close to their place of
employment or the CBD
The differences in home buyers’ preferences are due

Finland and Sweden Andersson et al. (2007) Qualitative to different institutional arrangements in connection
with different cultural values.
Housing preferences determined by components of
Gaza Jabareen (2005) Qualitative culture, mainly those related to issues of gender, by
gender, politics, religion, kinship, and social relations
Functionality and spaciousness of the house itself are
Holland Kauko (2006) Qualitative
more important than location attributes.
The structural characteristics play bigger roles than the

Fierro, Fullerton & neighbourhood amenities. Surprisingly,
Northern Mexico Quantitative
Donjuan-Callejo (2009) neighbourhood parks are found to lower housing
values.
Plot size, living space and number of bathrooms are

Pakistan Pasha & Butt (1996) Mix method the three most important attributes influencing housing
choice. Financial consideration is relatively low
Financial considerations, private living space, and

aesthetic aspects of the house rank as the top three
Opoku & Abdul-Muhmin
Saudi Arabia Quantitative factors in low-income consumers’ housing decisions.
(2010)
The three least important factors are exterior space,
street location, and proximity to relatives.
Pope (2008); Chay & Location of dis-amenities reduced home buyers'

United State Quantitative
Greenstone (2005) purchase probability
52
them, within the bounds of a certain total cost (Farmer & Lipscomb, 2010; Fierro et
al., 2009; Taylor, 2008). Past studies have discussed home buyers’ purchase
preferences in the context of particular countries, and have also investigated which
factors influenced consumers’ purchase behaviours. Three major debates concerning
consumer housing decisions are evident in the literature:
1) The first debate is to do with the relative importance of intrinsic and extrinsic
factors in housing choice. Many studies find that extrinsic traits like neighbourhood
amenities play important roles in determining housing value, and potential home
buyers are willing to purchase these neighbourhood amenities (Cheshire & Sheppard,
1995; Daniere, 1994; Pasha & Butt, 1996). Although some neighbourhood amenities
have a positive influence on housing price, many environmental or location
dis-amenities such as pollution, crime, pollution environmental degradation, traffic
congestion can reduce consumers’ perceptions of housing values (Chay & Greenstone,
2005; Pope, 2008). On the other hand, Fierro, Fullerton and Donjuan-Callejo (2009)
utilise data from 175 families in Ciudad Juarez to develop a hedonic pricing model for
North Mexico. A total of eight main characteristics relating to intrinsic housing
structure and six location attributes are employed as explanatory variables in their
report. Their results indicate that structural characteristics are more influential in
housing valuation than location factors; this means the intrinsic housing attributes
contribute more to higher values than other extrinsic attributes when consumers value
a house. Surprisingly, even some location facilities have a negative influence on
residents’ housing choices. Neighbourhood parks were consistently found to reduce
consumer-perceived housing prices in Ciudad Juarez. In addition, although many
recent studies overemphasise neighbourhood and location factors in consumers’
housing choices, Kauko (2006) finds that for most of housing consumers in Randstad,
Holland, the tangible factors of a house (intrinsic attributes) carry more weight than
intangible ones (extrinsic attributes). This indicates that the functionality and
spaciousness of the house itself are more important than location attributes.
53
2) As mentioned in Section 2.2.4.2, the culture and ethnicity of consumers affect all
five steps in the purchase process (problem recognition, searching for information,
evaluation and selection alternatives, purchase decision, and post-purchase behaviour )
in various ways. Some evidence from previous studies is related to the national and
cultural factors which have a significant influence consumer housing choice decisions.
The findings regarding the relative importance of housing preferences and house
attributes in a study cannot necessarily be applied to other contexts. Not surprisingly,
a lot of literature also suggests that the relative of importance of various housing
attributes differs across national and social contexts.
Opoku and Abdul-Muhmin (2010) find most of residents in Saudi Arabia prefer small
houses to duplex or apartments, and low-income consumers rate financial
considerations, private living space, and aesthetics as the top three factors when they
make a housing purchase decision, and the three least important housing attributes are
exterior space, street location, and proximity to relatives. Greene and Ortuzar (2002)
also find that type of dwelling is a very important attribute for consumers in Chile,
and building material appears as the most important variable, but the location is the
least important attribute. Price of the house (monthly mortgage) and size (number of
habitable rooms) do not appear as important attributes. The results of Pasha and Butt’s
(1996) study show the variable of financial consideration is of relatively low
importance for Pakistan’s consumers when choosing a house. For them plot size,
living space and number of bathrooms are most three important attributes. Spetic,
Kozak and Cohen (2005) examine the concept of “healthful living” in the residential
housing market in Canada, and they find that consumers demand better indoor
environmental quality, and they are willing to pay for house materials which promote
energy efficiency, good air quality, natural light, better insulation, non-allergic
qualities and other healthful living attributes. On the other hand, Wang and Li (2006)
used joint logit models comprising both neighbourhood and dwelling attributes, and
54
computed the impacts of these attributes on choice probabilities for consumers in
Guangzhou, China. According to their findings, neighbourhood attributes and location
facilities attributes are more important than intrinsic dwelling attributes. Bhatti and
Church (2004) find exterior design and exterior space, such as the design and space of
a garden, play a very important role for consumers in the modern UK housing market.
Alonso (2002) examines the social benefits of barrier-free buildings. He identifies lift
or elevator, main entrance, bathroom, and door width as access attributes, and finds
accessibility is a general concern, economic good or attribute that most households
value, and accessibility is one of the key factors influencing Spanish consumers.
The above findings also demonstrate the diversity of choice behaviours and intrinsic
housing attributes and extrinsic attributes across country contexts.
3) The literature also suggests social structure and cultural factors exert an impact on
the relative importance of various housing attributes. In particular, housing
preferences are determined by gender, politics, religion, kinship, and social relations
(Jabareen, 2005). The findings of Jabareen (2005) indicate that various cultural
components, kinship relations and attitudes toward women are crucial factors for
individual Palestinians seeking new housing. According to Andersson et al. (2007),
consumer housing preferences (such as perceived housing-related security and risk,
meaning of housing attributes, housing regime) tend towards convergence given the
marked similarities due to common history and cultural diffusion in Sweden and
Finland, and the differences in consumer attitudes are due to different institutional
arrangements in connection with different cultural values attached to housing and
tenure. Sirgy, Grzeskowiak and Su (2005) argue that attributes and preferences
research which focuses on functional aspects of residential housing could be enhanced
by integrating social and psychological determinants.
As shown above, the main three points in the literature are:

1. Housing attributes and related purchase factors have a crucial influence on
55
consumers’ housing purchase decisions.
2. Consumers’ purchase decision varies across national contexts.
3. Social and cultural considerations have heavily impacted on the relative importance
of housing attributes and they influence consumers’ final house purchase decisions.
This section briefly introduced Rosen’s (1974) two-step approach in the housing
hedonic model, and then examined a wide range of housing attributes. Conclusions
about the relative importance of housing attributes and related purchase factors were
also presented. The next section reviews theory on housing service quality.
2.3.4 Quality of housing services
Section 2.3.1.1 demonstrated that the housing market has three parts: the dwellings
trading market, the rental housing market and the housing service market. While
residential house builders traditionally consider consumer service in terms of
upgrades and aim to improve the competitiveness of the housing services they provide,
residential house buyers view the quality of service on a much broader basis. So, in
order to find out how consumers make residential house purchase decisions, a
thorough understanding of the housing service quality segment is also required.
2.3.4.1 Categories of service mix
The service component can be a minor or a major part of the total offering. The five
categories of offering are:
1. Pure tangible good
2. Tangible good with accompanying services
3. Hybrid (equal mix of tangible good and services)
4. Major services with accompanying minor goods and services
5. Pure service (Kotler & Keller, 2009).
56
Housing services in China belong to the second category – tangible goods with
accompanying services. These offerings consist of a residential house accompanied by
services provided by housing suppliers. This kind of housing service needs a broad
range of high-quality support services (Kotler & Keller, 2009). As mentioned in
Section 2.3.2, the services provided by suppliers fall into three categories:
1. Maintenance: the work needed to keep or restore the building at an acceptable level
2. Alterations: improvements to facilities which can make the building more suitable
for existing use.
3. Conversions: provision of new facilities or rearrangements of internal space to
make the building suitable for a new functional use (Priemus, 1984).
All three kinds of services provided by suppliers should aim to meet home buyers’
personal needs and wants.
2.3.4.2 Defining service quality in residential housing
Since the 1980s, service quality has been given a great deal of attention as a strategic
factor for product differentiation to increase market share and boost profits (Kotler &
Keller, 2009). Many researchers focus on issues regarding conceptualisation and
measurement of service quality. Service quality has become a specialist area of study
due to the increasing role of services in modern economies (Kotler & Armstrong,
2009). Because of the difficulty of applying product quality definitions to services, the
concept of service quality has been developed. "Quality" has been defined in many
ways and service quality is a multidimensional construct and each dimension
influences quality assessment (Parasuraman, Zeithaml, & Berry, 1985). Garvin’s
(1983 & 1988) three types of quality have been widely accepted by scholars and the
details are listed below:
Product quality: Focuses on creating an objective set of rules for measuring the
physical attributes of product quality.
Manufacturing quality: Is oriented to the supplier's perspective of quality by focusing
on internal process control. Importance is oriented towards developing reliable,
57
repeatable and efficient production processes.
User quality: Takes the customer's perspective of quality and focuses on all things that
influence the customer's awareness of quality. It is a relativistic evaluation in terms of
varying from one customer relative to another.
In the residential housing market, service quality fits into the third category of user
quality (Forsythe, 2008; Lam, 2007). Marketers provide maintenance, alterations and
conversions services to consumers and consumers perceive these service processes in
terms of interactions, activities and dynamic events.
2.3.4.3. Consumer service quality expectations
Consumers form service quality expectations from various resources, such as personal
need, word-of-mouth communications, their personal past experiences and media
communication. Generally, consumers try to compare perceived service quality with
expected service quality. If consumers perceive the service provider performing better
than expected, this exerts a positive influence on satisfaction. On the other hand, if
perceived performance falls short of prior expectations, this exerts a negative impact
on satisfaction (Oliver, 1981 & 1997; Hill, Roche & Allen 2007). Delighting
customers is a matter of exceeding their expectations.
In order to investigate issues related to service quality, Parasuraman, Zeithaml and

Berry (1985) introduced their concept of service quality, and create a service-quality
model based on the service delivery process. This model is widely considered as a
“gap model” which emphasises service quality “gaps” during the service delivery
process. The service-quality gap model shown in Figure 2.14 (see next page)
highlights the related requirements in service delivery processes, and demonstrates
there are five gaps which may cause unsuccessful service delivery.
58
Figure 2.14 Service quality model
Word-of-mouth
Personal needs Past experience
communication
Expected service
GAP 5
perceived service
Consumer
Marketer
Service delivery GAP 4 External
(including pre-and communications
post-contacts) To consumers
GAP 1
GAP 3
Translation of
perceptions into
Service-quality
specifications
GAP 2
Management
perceptions of
consumer
expectations
Source: Parasuraman, Zeithaml & Berry (1985) “A Conceptual Model of Service

Quality and Its implications for Future Research” Journal of Marketing, 41-50
This gap model represents consumers beginning a service encounter with certain
expectations. Prior expectations are generated from consumers’ daily word-of-mouth
communications, personal past experiences and needs. The marketers deliver services
to consumers according to a generic process by addressing Gaps 1 to 4. Finally, the
consumers compare the perceived service delivery process and their prior
expectations – as shown in Gap 5, and determine how good or bad the service was.
59
The final gap – Gap 5 is influenced by the cumulative effect of the previous four gaps.
The first four gaps are:
Gap 1: The gap between consumers’ prior expectations and the marketers’ perception
of the consumers’ expectation.
Gap 2: The gap between the marketers’ perception and the translation of service
specification.
Gap 3: The gap between service quality specifications and the service that is
successfully delivered to the consumer.
Gap 4: The gap between what is communicated about the service to consumers and
what service is successfully delivered to the consumer.
The above four gaps are not treated individually; instead, their cumulative effect
contributes to Gap 5 which is the gap between consumers’ overall perceptions of
service quality and their prior expectations.
2.3.4.4 Service quality dimensions and assessment tools
The marketers’ service quality could be assessed by measuring the differential

between consumers’ expectations and their assessments of actual services received.
Based on the service-quality gap model, Parasuraman, Zeithaml and Berry (1985,
1988 & 1993) suggest the following five determinants could measure the quality of
service.
1. Reliability: Reliability involves consistency of performance and dependability. It
implicates the ability to perform the promised service dependably and accurately, and
the ability to perform the service right the first time.
2. Responsiveness: Responsiveness implicates the willingness of employees to help
consumers and to provide prompt service.
3. Assurance: Possession of the required skills or knowledge to perform the service,
and the ability to convey trust and confidence to consumers.
4. Empathy: Empathy involves marketers being polite, respectful and friendly with
60
the consumer. It involves individualised attention to consumers, and making an effort
to meet consumers’ needs and wants.
5. Tangibles: Tangibles include the physical evidence of the service, such as physical
facilities, the appearance of personnel, the equipment used to provide consumer
services and communication materials.
These five dimensions are used as a diagnostic tool for marketers to identify weakness
in the service delivery processes, and based on these five dimensions, Parasuraman,
Zeithaml and Berry (1985) developed the multiple-item scale instrument
(SERVQUAL) for measuring consumer perceptions of service quality. The
SERVQUAL includes 21 items as shown in Table 2.4 below (see next page).
2.3.4.5 Assessment of service quality in the residential housing
industry
As mentioned in Section 2.2.3, the consumer purchase decision process has five
stages, which include problem recognition, searching for information, evaluating and
selecting alternatives purchase decision and post-purchase behaviour. Consumers’
purchase decision processes are influenced by individual factors (1. demographics,
personality and lifestyle; 2. personality, value and lifestyle; 3. motivation; 4.
knowledge; 5. intention, attitudes, beliefs and feelings internal) and environmental
factors (1. culture, ethnicity, and social class；2. family and household influence；3.
group and personal influence). All of these individual and environmental factors
positively impact on consumers’ product and service choices (Blakwell, Souza, et al.,
2006; Quester et al., 200). In the developing residential housing service market,
understanding what consumers are looking for, and how they will evaluate services is
important. Consumers need service quality from service providers. Marketers provide
maintenance, alterations and conversion services to consumers and consumers
perceive these service processes in terms of interactions, activities and dynamic,
61
Table 2.4 Service quality attributes
Reliability Empathy
·Providing service as promised ·Giving customers individual attention
·Dependability in handing customers’ ·Employees who deal with customers in a
service problems caring fashion
·Performing services right the first time ·Having the customer’s best interests at
·Providing services at the promised time heart
·Maintaining error-free records ·Employees who understand the needs of
·Employees who have the knowledge to their customers
answer customer questions ·Convenient business hours
Responsiveness Tangibles
·Keeping customers informed as to when ·Modern equipment
services will be performed ·Visually appealing facilities
·Prompt service to customers · Employees who have a neat, professional
·Readiness to respond to customers’ appearance
requests ·Visually appealing materials associated with the
Assurance service
·Employees who instill confidence in customers
·Making customers feel safe in their transactions
·Employees who are consistently courteous
Source: Parasuraman, Zeithaml & Berry (1985) “A Conceptual Model of Service

Quality and Its implications for Future Research” Journal of Marketing, 41-50
events. The consumers’ perceptions affect the way they value particular services
choose between different providers and evaluate service delivery (Schiffman et al.,
2012). Nahmens and Ikuma (2009) and Forsythe (2008) adopted the five main
dimensions of service quality to assess service quality in construction housing in US.
They adopted the five dimensions and service-quality gap model to analyse home
buyers’ perceived service quality and tried to find out whether the actually received
62
service quality met or exceeded home buyers’ expectations. The five dimensions
extracted 21 housing service quality attributes in their study (illustrated in Table 2.4).
Based on Parasuraman, Zeithaml and Berry’s (1985) service-quality gap model, the
model for home buyer purchase decisions regarding service quality, developed by
Forsythe (2008) and Saari and Tanskanen (2011), is presented in Figure 2.15.
Figure 2.15 A model of home buyer assessment of service quality
Word-of-mouth
Personal needs Past experience
communication
Consumer service
Dimensions and Expectations (Pre-
assessment tools: purchase stage)
1. Reliability
2. Responsiveness Consumer post-purchase
3. Assurance Satisfaction
4. Empathy Consumer service
5. Tangibles Perception(Post-purchase
stage)
Source: Developed for the research based on Forsythe (2008)
This model of home buyer assessment of service quality is used with some
modifications to examine what consumers need, how they look for alternatives, how
they evaluate them, and whether they are satisfied with the quality of the service from
the service supplier. The model defines service quality as the difference between
consumers’ service expectations and what they actually experience. Word-of-mouth
communication, advertisements, other information channels, consumers’ personal
needs and their past experiences exert an impact on consumer service expectations.
These expectations play a role during their residential house pre-purchase decision
process, and after they make the purchase decision. They also affect how they
perceive the actual service received from marketers. The differences between their
service expectations and their actual experiences lead to a customer satisfaction gap.
Five dimensions (reliability, responsiveness, assurance, empathy and tangibles) are
employed to assess service quality and measure the consumers’ evaluative criteria.
63
Forsythe (2008) and Saari and Tanskanen (2011) developed this theoretical model of
the way service quality influences the perceptions of consumers in housing
construction. They point out that this model can be used in the measurement of how
consumers perceive service quality value during the design and construction process.
Housing marketers can also use this model to identify the gaps between consumer
expectations and perceptions, and then improve their service to achieve a competitive
advantage. Torbica and Stroh (1999 & 2001), Atterhog (2005) and Nahmens and
Ikuma (2009) investigate home buyers’ perceptions of service quality across
demographics and transaction characteristics in the US. They find that some variables
such as residential house price, size, and the house-buyer’s income influence their
housing service expectations and perceptions. Also, house buyers’ overall service
quality satisfaction is significantly influenced by all five dimensions (reliability,
responsiveness, assurance, empathy, and tangibles). Furthermore, they argue
residential house service providers could increase customer satisfaction by effectively
reducing the gaps between customers’ service quality expectations and perceptions.
Based on Table 2.4, some researchers have used the five service dimensions to
investigate the relationship between housing service quality attributes and home
buyers’ satisfaction. Table 2.5 (see next page) summarises the service quality
attributes investigated in the literature, and computes the frequency with which each
attribute has been researched. These 21 service quality items are general items for all
the service industry, not particularly for housing industry. Thus, some general service
quality items are not suitable for housing contexts. Residential housing is the family’s
largest single asset, which is a different good compared with other commodities. The
services quality for other commodities may not suitable for housing. For example, in
the housing context, the service quality attributes exclude “performing services right
the first time”. Because providing housing maintenance services is a complicated and
time consuming process, the suppliers usually cannot provide all required services the
first time (Nahmens and Ikuma (2009).
64
Table 2.5 Summary of service quality attributes mentioned in the literature
Korunka, Torbica
Nahmens Scharitze, and
Forsythe
Service quality attributes & Ikuma Carayon & Stroh Total
(2008)
(2009) Sainfort (1999&
(2003) 2001)
Reliability
1. Providing service as promised ♦ ♦ ♦ ♦ 4
2. Dependability in handing customers’ Service
problems ♦ ♦ ♦ 3
3. Performing services right the first time ♦ 1
4. Providing services at the promised time ♦ 1
5. Secure housing transaction is important to home
buyers. ♦ ♦ ♦ ♦ 4
6. Employees who have the knowledge to answer
customer questions ♦ 1
Empathy
7. Giving customer individual attention 0
8. Employees who deal with customers in a caring fashion 0
9. Having the customer’s best interests at heart ♦ ♦ ♦ ♦ 4
10. Employees who understand the needs of their
customers ♦ ♦ ♦ 3
11. Convenient business hours ♦ ♦ ♦ 3
Responsiveness
12. Keeping customer informed as to when services
will be performed 0
13. Prompt service to customers ♦ ♦ ♦ ♦ 4
14. Readiness to respond to customers’ requests ♦ ♦ 0
Assurance
15. Employees who instill confidence in customers ♦ ♦ 2
16. Making customers feel safe in their transactions 0
17. Employees who are consistently courteous ♦ ♦ ♦ 3
Tangibles
18. Modern equipment 0
19. Visually appealing facilities 0
20. Employees who have a neat, professional
appearance ♦ ♦ ♦ 3
21. Availability of after sales service ♦ ♦ ♦ 3
65
The frequency was three times or greater for 10 out of 21 housing service quality
attributes in the past studies. Thus, these ten service quality attributes were extracted
from the literature and used to measure the quality of the services provided by
suppliers in this research. These selected 10 service items had been considered
suitable for the housing context. These 10 items also cover all the five services
dimensions, which are consistent with current service quality research (Parasuraman,
Zeithaml & Berry (1985).
This section briefly explained the development, products, and services of the global
residential house market, and then discussed consumer housing choice behaviour. The
literature on housing attributes and service quality was reviewed to explain how
consumers make purchase decisions and meet their real needs and wants. The next
section describes China’s residential housing market.
2.4 China’s residential housing market

A potential contribution of this research is its focus on China and its housing market
and its ability to fill the gaps in past studies. This section presents an introduction to
China’s housing market to establish the research environment. An explanation of the
four development phases of China's real estate market and a profile of China's housing
industry are provided, followed by the residential housing market expansion in Wuhan,
and the relevant variables in an analysis of socio-demography in Wuhan.
2.4.1 An overview of China’s residential housing sector
The real estate industry was owned, managed, and controlled by the government
under a socialist central-planning economic system until 1988. In 1998 a new reform
started in the real estate industry in China. Over the past two decades, real estate has
evolved from a government controlled sector into a commercial product, and has
become an important component of China’s financial markets (Fung, Jeng & Liu,
2010; Peng, Groenewold, He, Li & Yi, 2007). However, the state still owns all the
66
land, and land expropriations are facilitated. Local governments obtain substantial
amounts of bank financing, made possible by the high savings rate, through land
development and infrastructure construction. In recent years, the real estate industry
has become one of the most important influences on China’s economy, and it is
considered as an essential part of the overall functioning of the economy by most
Chinese economists (Li & Yi, 2007; Sun, Fan, Zhou, & Shi, 2010; Wang, 2011; Xu &
Chen, 2012).
2.4.1.1 General development of China’s real estate market
The four development phases

The development history of China’s real estate sector since 1949 can be divided into
four phases. The milestones of China’s real estate market development in recent years
are present in Table 2.6 below:
Table 2.6 Development history of China’s real estate market
Source: Adapted from Rao, X. & Zhou, Y. 2010
The first phase

The first stage of China’s real estate market was from the founding of the People’s
Republic in 1949 to 1978. This period can be considered as the pre-reform period, and
the industrial structure in China was characterised by rigid central planning and
extensive government control of businesses. The Chinese government employed the
67
“welfare housing” system, and government agencies and all enterprises, whether
state-owned or collectively owned, provided low-rent housing to all employees. All of
the real estate industry was owned and controlled by the central government; there
was no private ownership during this first period (Tian et al., 2007).
The second phase

The second phase lasted from 1978 to 1988. Deng Xiaoping, the top leader of the
People’s Republic introduced economic reforms and the open door policy in 1978.
The real estate marketisation process was formally initiated in this decade, related
legislation was enacted as well. According to the Constitution of the People's
Republic of China in 1982, land in China is owned either by the state or by collectives.
Some main cities in China like Beijing and Shanghai were selected by the central
government for experiments in the “One-Third Housing Sale Model,” in which the
government, state-owned enterprises (SOEs), and individuals each bore one-third of
the construction and maintenance costs for new units (Fung et al., 2010). However,
this reform did not spread widely in China, because most of the Chinese people had
very low individual income levels. But this reform still provided valuable experience
for the Chinese government to develop China’s real estate market for later reforms.
The third phase

The third phase extended from the beginning of 1988 to1998. The real estate structure
in China in this period was characterised by formal initiation of the marketisation
process. China’s constitution changed in 1988 to permit the transfer of state-owned
land-use rights. Many provinces and cities had the right to trade land-use rights during
this period (although the national state still had the ownership of the land), many real
estate services such as real estate brokerages and property management agencies
emerged in some main cities and this trend gradually spread across to the whole of the
country (Tian & Fan, 2008). Two important laws were established during this period
by the constitution to provide the main legal framework for real estate markets in
68
China: the Primary Real Estate Legislation and the Urban Real Estate Law (Rao &
Zhou, 2010).
The fourth phase

This phase extends from 1998 to the present. It is the phase in which the Chinese
government abolished the remnants of the old housing system. In July 1998, the State
Council issued a decree which annulled the “Welfare Housing” policy. As a result, all
employers in China had to convert real housing distribution to financial housing
assistance. Chinese employees had to use their personal salaries, personal banking
mortgage loans, and housing subsidies to purchase their personal houses (Fung et al.,
2010). This reform introduced many business opportunities into China and resulted in
a tremendous acceleration in the growth of the real estate market (Chen, Guo, & Wu,
2011). Housing prices have increased rapidly in the last decade with an annual
average rate of increase of 13.4 per cent (China Real Estate Statistics Yearbook, 2011).
During this period, land was actually privately owned although the state still had
nominal land ownership. However, the state still plays a dominant role in the real
estate market in China by issuing a series of real estate adjustment measures such as
modifying the land policy and tax standards to control real estate development. For
example, in order to address the sharp decline in the real estate market in 2007 and
2008, the Chinese government introduced numerous policies including reducing
mortgage interest rates, lowering payment requirements, extending mortgage loan
terms, relaxing or eliminating the caps on loans from the housing Public
Accumulation Fund, converting commercial mortgage loans to government-backed
ones, reducing or removing the housing deed tax, offering direct subsidies to house
buyers, relaxing regulations on second house purchases, and eliminating the real
estate stamp tax. All of these government macro-control efforts have exerted a
positive influence on the real estate market and they have helped the market to
prosper again from late 2009 to the present (Chau & Zhang, 2011; Tang, Wong, & Liu,
2011).
69
In China’s current housing market, private real estate dealers prefer to build mainly
residential housing. Due to the large market demand, huge profits can be obtained
with government policy support. At the end of 2005 the major target consumers of
residential housing companies were middle and high income earners (Sun et al., 2010;
Wang et al., 2011). Private dealers always lack the motivation to focus on the lower
end of the housing market due to lower profitability, less competition, and the
payment of penalties. Therefore, since the beginning of 2006, the central government
has forced housing developers to supply the low and some of the middle-low income
segment of the market. Thus, the fully market-oriented residential housing market in
China can satisfy every income group (Rao & Zhou, 2010).
2.4.1.2 A profile of China’s residential housing market in the last
decade (2002–2012)
The urban housing market is a lucrative, fast-growing segment of China’s real estate
industry and this market is considered to have been one of the fastest-growing
markets over the last two decades (Chen et al., 2011; Yu, 2006). According to a report
by NBSC in 2012, China’s urban population increased by more than 114 million
between 2002 and the end of 2012. The average annual urbanisation rate was
approximately 1.57 per cent in this ten-year period, and the urbanisation rate was
31.86 per cent in 2001 and 47.58 per cent in 2012 (China Statistical Yearbook 2012).
Most of the new immigrants to city areas moved from the countryside and small
towns during this decade. From 2000 onwards, the urban housing market in China has
seen a huge boost in demand due to continuous urbanisation and prolonged economic
growth, although the supply was persistently deficient before that time (Wang et al.,
2011). In the last three decades the rate of urban home ownership has risen much
more rapidly in the cities than in the countryside and small towns, with the ownership
rate at approximately 20 per cent in the 1980s and 67 per cent in 2010 (Fung et al.,
2010). A further acceleration in the home ownership rate emerged in the late 1990s. A
70
report of NBSC indicated that the urban housing ownership rate reached 80 per cent
in 2004 and the rate is expected to continue to rise in the next ten years. The State
Development Planning Commission (2012) reports that the urban population in China
reached approximately 380 million at the end of 2012, and simultaneously, the urban
housing demand increased by about 450 million square metres per year from 2006 to
2012 (China Real Estate Statistics Yearbook, 2012).
The market-oriented housing reforms of 1998 and the high market demand for houses
have caused housing prices to jump sharply in the past ten years all over the country.
The National Bureau of Statistics of China calculates the average housing prices in 35
major cities in China and indicates that the average housing price rose from 3516
RMB/m2 to 5748 RMB/m2, with an average growth rate of 63.5 per cent from 1998 to
2008. Residential house prices are expected to go up slowly in the next few years
(Zheng, Kahn, & Liu, 2010).
Impact of the Global Financial Crisis on China’s housing market

Although China’s residential house market boom from 1998 to 2007 was one of the
biggest in the world, this market is positively influenced by the global housing market.
A huge financial storm swept through the United States and most European countries
in 2008, and the financial crisis began to affect the economy and reduce people’s
disposable incomes, and this caused a significant shrinkage of the whole housing
market in the USA and European countries. Inevitably, China’s housing market took a
tumble and a sharp drop occurred in the housing market in China after July 2007
(Wang, 2011; Xu & Chen, 2012). Pan (2009) reports there was a large decline in the
Real Estate Industry Entrepreneur Confidence Index after March 2008. Residential
house sale volumes decreased by 32 per cent in 2008 when compared to 2007 in
sixteen major cities. Housing prices also dropped by 10 to 40 per cent in China’s main
cities in the space of one year (Wang, Yang & Liu, 2011).
71
Housing prices continued to drop at the beginning of 2009 and this caused many
potential house buyers to remain on the sidelines. Unlike the US and most European
housing markets, a rapid recovery began in April 2009 in China, and the market
continued to rise up sharply in 2009 and 2010. Residential house prices and saleable
areas reached their highest point at the end of 2010 in most major Chinese cities
(China Real Estate Statistics Yearbook, 2011; Xu & Chen, 2012).
2.4.1.3 Increasing investment in China’s residential housing
market
Housing reform generated continuous and growing interest in institutional structures

and resulted in investigations of the relationship between the state and the market (R.
Cooper, Evans, & Boyko, 2009). Because China’s constitution permitted the transfer
of state-owned land-use rights in 1988, state investment in housing fell sharply.
Instead investment from local governments, real estate dealers, individuals and work
units increased rapidly, accounting for 89.4 per cent of total investment at the end of
2007 (China Real Estate Statistics Yearbook, 2008). Figure 2.16 (see next page)
shows the decrease in the state’s investment in the residential housing market and the
sharp increase of capital construction investment from the late 1960s to 2001. This
period has experienced the four phases of housing reform.
In the past two decades, the residential housing industry which was developed by real
estate developers has gradually become the dominant sector of China’s housing
industry. After the fourth phase of housing reform at the end of 2003, 734.8 billion
RMB in investment came from real estate developers and 1.2 million workers were
employed in housing development companies in 35 main cities. Since 2003, real
estate dealers have continuously gathered capital and invested in China’s residential
house market. By the end of 2011, the total investment from real estate dealers
72
Figure 2.16 Capital construction investment in China
Source: Adapted from China Statistical Yearbook, 2010
reached 4,300 billion RMB, with an average annual investment growth of 25 per cent,
which is nearly three times as much as the national GDP growth rate in the past five
years (China Real Estate Statistics Yearbook, 2011).
Investment by households through building and purchasing residential housing has

also significantly influenced China’s residential housing industry. The annual
investment in self-built housing accounted for 203.6 billion RMB in 2010, with an
annual average increase of 6.7 per cent in the past five years. On the other hand, due
to increases urban workers’ incomes in last decade, and the establishment by The
People’s Bank of a personal housing loans scheme which was introduced in 1998,
more urban workers could afford to purchase residential housing (Quan, 2006). As a
result, according to an NBSC report in 2010, the proportion of residential housing
bought by individual householders increased to 92.60 per cent at the end of 2010.
Overseas investment also significantly increased after the housing reforms in 1988.
The open land policy and high profit margins in the urban housing industry have
73
attracted a huge influx of foreign investment. Foreign investment as a proportion of
total investment increased from 1998 to 2008, and began to integrate the Chinese
economy with the world economy (Hong & Sun, 2011; Yu, Chen, & Sun, 2010). At
the end of 2008, China’s total foreign direct investment amounted to US$ 92.4 billion.
Astonishingly, 73.70 per cent of this foreign capital was utilised to invest in fixed
assets. Although overseas investment fell due to China’s real estate market’s
temporary decline, the total overseas property investment has recovered quickly in
the middle of 2010 and has risen continuously since then (China Real Estate Statistics
Yearbook, 2010).
Investments from Hong Kong and Macau entrepreneurs in recent years have also
contributed to China’s real estate market. Investment from Hong Kong and Macau
accounted for 287.3 billion RMB by the end of 2011, with an average annual increase
of 31.62% p.a. from 2001 to 2011 (China Real Estate Statistics Yearbook, 2012).
2.4.1.4 Regional gaps
Regional gaps of affordability

China’s economic growth in the last two decades has not been distributed equally
among China’s provinces and regions. Per capita income and GDP growth in coastal
cities has outstripped that of the inland cities (Cho, Jin, & Cho., 2010; Peng et al.,
2010). According to a report of the National Bureau of Statistic of China in 2010, the
coast/inland ratio of mean GDP per capita increased from 2.53 to 3.24 between 1978
and 2010. This imbalance in economic growth between the coastal and inland areas
has resulted in regional gaps in house prices in China (Fung et al., 2010; Zhang &
Fung, 2006; Zheng et al., 2010). Table 2.7 (see next page) shows a comparison of the
residential house market between first-tier coastal cities and second-tier inland cities,
represented by the sample cities, Shanghai (SH) and Chengdu (CD). Shanghai
obviously has a larger market due to its bigger population; the average housing prices
74
Table 2.7 Housing trade market comparison between Shanghai and Chengdu
2006 2007 2008 2009 2010 2011
SH CD SH CD SH CD SH CD SH CD SH CD
Residential Housing
2,846 1,090 2,651 1,427 2,943 1,755 3,237 2,159 3,580 2,267 3,762 2,636
sold (10,000 sq m)
Avg residential price

6,698 2,854 7,039 3,437 8,376 4,193 9,967 5,116 12,533 6,288 15,827 6,917
(RMB/sq m)
Avg urban
disposable income 18,645 11,359 20,668 12,789 23,562 14,196 26,860 157,57 28,780 17,566 31,068 21,304
(RMB)
Avg no. of
2.70 2.90 2.70 2.90 2.70 2.90 2.70 2.90 2.70 2.90 2.70 2.90
persons/household
Ratio of housing
11.97 7.88 11.35 8.43 11.30 8.51 11.87 8.80 12.05 9.32 13.14 9.93
affordability
Sources: Shanghai Housing and Land Resources Administration (2012); Chengdu

Housing and Property Administration (2012)
and employees’ incomes are also much higher in Shanghai than in Chengdu. However,
the higher ratio of housing price to household income in Shanghai (13.14 in 2011)
compared with Chengdu (9.93 in 2011) indicates that a serious affordability problem
exists in Shanghai.
Variations in housing choice

In China’s residential house industry, home buyers have to rely on the market to
satisfy their housing needs. The growing freedom to choose houses implies increasing
variations in all aspects of housing consumption (Rao & Zhou, 2010b). Only a few
studies have been done on multiple home preferences in China in recent years; and
most of these studies have only focused on the primary metropolitan areas such as
Beijing, Guangzhou and Shanghai. Residents’ housing preferences in Guangzhou and
75
Beijing are very similar, and the homebuyers in both of these cities attach greater
importance to extrinsic housing attributes including neighbourhood and location
attributes than to intrinsic housing attributes when making home purchase decisions.
Consumers place more importance on living convenience and accessibility to public

transport. However, unlike the case of Guangzhou in which there is a uniformly
strong preference for the inner core districts, in Beijing some home buyers do not
prefer inner core districts. On the other hand, socio-economic factors such as income,
education level and age have been influential in housing preference formation in the
two cities (Wang & Li, 2006; Barros, Chen & Gil-Alana 2012). Han (2010) has
employed a discrete choice approach to investigate consumers’ housing demand in
Shanghai. His report points out that the quality indicator for housing attributes can be
interpreted as the major measure of attractiveness and it is a money metric measure
for consumers. Regarding location factors, potential home buyers are willing to pay
more for a non-downtown location than a downtown location in Shanghai. Zhou
(2011) uses micro-data from the residences of Chinese main cities; his report
concludes that uncertain educational expenditure, unemployment, and family medical
expenditure have a negative effect on housing amenities choice among low income
groups. Li and Yi (2007) state that in some of China’s western cities, the inner core
districts are dominated by older residents and low income groups, while the outskirts
are occupied by younger, richer and better-educated people.
Summing up the limited previous papers in China, housing attribute priorities vary
across cities and socio-economic factors have been influential in housing preference
formation in China. In this research, the researcher uses data derived from a survey in
Wuhan, to investigate socio-demographic differentials and state housing preferences.
The next section introduces this target city and explains this potential sample group.
76
2.4.2 The profile of Wuhan
The setting for this research is Wuhan, one of the ten largest cities in China. In 2010
Wuhan has ranked by seventh among Chinese cities for total retail consumer
spending , eighth in Gross National Product and total ninth in Fixed Asset Investment
(Wuhan Statistical Bureau and Wuhan Development and Planning Committee, 2011).
Wuhan is located in the central region of China. It is the capital and major cultural,
industrial and commercial city of Hubei province. The city is composed of three
towns of Wuchang, Hankou, and Hanyang. These three towns are separated by the
Yangtze and Hanshui rivers. The neighbouring provincial capital cities such as
Changsha (Hunan Province), Zhengzhou (Henan Province), Nanchang (Jiangxi
Province), are within a 600 kilometres radius of Wuhan. Lying at the very heart of
China, Wuhan is roughly equidistant from Beijing and Guangzhou on a north-south
axis and is also roughly equidistant from Shanghai and Chongqing on an east-west
axis, as shown in Figure 2.17 (see next page). Being the largest inland port on the
middle reaches of the Yangtze River and a major stop on the Beijing-Guangzhou
Railway, Wuhan is considered as the central city of the whole of China, and the most
important rail link for maintaining communication with other provinces in China
(Pletcher, 2011). Wuhan is also an important centre for economy, trade, finance,
transportation, information technology, and education in central China, with a
population of approximately 9.80 million (Wuhan Statistical yearbook, 2011). The
GDP of Wuhan topped 650 billion RMB in 2011, with an annual average increase of
12 per cent in the previous five years. The total value of imports and exports accounts
for 14 per cent of its GDP. The five major industries in Wuhan are electronic
information, automobiles, petroleum, equipment manufacturing and food. The total
output for these industries reached 400 billion RMB in 2011 (China Statistical
yearbook, 2011).
77
Figure 2.17 Geography of Wuhan
Source: The Geography of China: Sacred and Historic Places, Pletcher 2011, pp 229.
2.4.2.1 Residential housing market expansion in Wuhan
China’s housing market has made rapid development and has undergone large-scale
expansion in the past decade, as we mentioned in Section 2.4.1.3. Wuhan, as one of
the top ten cities in China, followed China’s housing market’s four development
phases. The total saleable area in Wuhan is 13.40 million square metres, with an
annual average increase rate of 6.50 per cent from 2006 to 2011. The average housing
price was 6,878.23 RMB/square metre in 2011, with an annual average increase rate
12 per cent from 2006 to 2011. The total investment in the residential house market in
Wuhan was 73.70 billion RMB in 2011, with an annual average growth rate 16.9 per
cent from 2006 to 2011 (China Real Estate Statistics Yearbook, 2012).
2.4.2.2 The relevant variables in an analysis of socio-
demography
Average disposable income per head in Wuhan

Average disposable incomes of residents in Wuhan compare well with the Hubei
province average. Wuhan’s average stood at about 23,738 RMB in 2011, with an
average annual growth rate of 15.34 per cent from 2006 to 2011. While the Hubei
78
province average was 17,820 RMB in 2011, China's urban resident average was
23,979 in 2011. The average number of persons/household is 2.78 in Wuhan (China
Statistical yearbook, 2012).
The structure of Wuhan’s workforce

Table 2.8 (see next page) presents the percentages of workers that are employed in a
variety of industries in Wuhan. Agriculture, forestry and fisheries are Chinese
foundation industries, but have a small percentage of the total workforce in Wuhan
and this percentage has decreased sharply during the past five years. Traditional
Chinese industries such as manufacturing have occupied a major percentage of the
total workforce but have also showed a decline in the past five years. On the other
hand, this table shows a great increase in the percentage of people employed in the
construction industries from 2006 to 2011. These industries which include electricity,
gas and water, education, construction and public management and social organisation
account for large percentage of total employment in Wuhan. Many of these jobs are
likely to be stable, respected and pay well in Hubei province. This outcome appears to
be consistent with the relatively high level of average disposable income in Wuhan.
Housing affordability ratios in Wuhan

As discussed in Section 2.4.1.4, one measure of housing affordability is the ratio of
housing price to household income (Schwartz, 2010). The average per capita
disposable income has increased from 12,360 RMB in 2006 to 23,738 RMB in 2011,
with an average annual growth rate of 15.34 per cent, which has outpaced the housing
price growth (21 per cent from 2006 to 2011) in Wuhan. The ratio of housing price to
household income has risen from 8.21 in 2006 to 9.90 in 2011; the ratio is below the
average ratio of 10.87 in China (Wuhan Housing and Land Resource Administration
2011). Comparing the housing affordability ratio in some major metropolises,
Shanghai (13.14 in 2011), Beijing (13.04 in 2011), Chengdu (9.93 in 2011),
79
Table 2.8 Structure of the workforce by industry type 2006 and 2011
Wuhan workforce by industry
2006 2011
Agriculture, Forestry and Fisheries 6.41% 3.24%
Mining 2.41% 1.81%
Manufacturing 29.48% 24.33%
Electricity, Gas and Water 10.86% 2.46%
Construction 6.90% 14.33%
Transport, storage and postal service 5.90% 6.53%
Information transfer, IT and software 0.75% 0.94%
Wholesale and Retail trade 5.39% 4.13%
Accommodation and Catering 1.86% 1.36%
Finance 2.53% 3.26%
Real Estate Management 0.98% 1.17%
Lease and Commerce Service 1.45% 0.94%
Scientific Research, Technical Service 1.88% 2.20%
Environment, Communal Facilities Management 1.77% 1.72%
Neighbourhood Services and other service 0.27% 0.25%
Health, Social Security, Social Welfare 4.92% 5.71%
Education 12.59% 13.26%
Culture, Sport and Entertainment 1.24% 1.05%
Public Management and Social Organisation 10.86% 11.27%
Total 100.00% 100.00%
Source: National Bureau of Statistics of China 2006 and 2011
Guangzhou (12.74 in 2011) (China Real Estate Statistics Yearbook, 2011 & 2012),
residents in Wuhan have less affordability problems. The greater housing affordability
implies that home buyers’ purchase choices may not be as price-sensitive in the
Wuhan housing market.
This section reviewed China’s housing market; the next section justifies this research.
2.5 Research justification

This section justifies the research by presenting the gaps in the literature, and by
explaining the importance and expansion of the residential housing market in China.
80
2.5.1 Gaps in the literature
The first ground for research justification is the gaps in the literature. There can be
seen to be three major differences between this research and past literature.
Firstly, although there are many studies which seek to understand how consumers
make their purchase decisions on housing attributes, in recent years there has not been
enough research about how China’s consumers choose residential housing attributes
(studies in housing preferences in China were mentioned in Section 2.3.3).
Furthermore, most of these studies only focus on the market in some Chinese primary
metropolises, such as Beijing, Guangzhou and Shanghai, but there is a lack of
research examining housing buyers’ purchase behaviour in Wuhan. This may be
because the volumes of property transactions in these primary cities were much higher
than in Wuhan, as were the increases in housing prices in these metropolises in past
decades (China Real Estate Statistics Yearbook, 2010). After reviewing previous
studies, the findings are: (1) the relative importance of consumers’ housing attributes
varies across national contexts (2) the social and cultural factors considered by
consumers have heavily impacted on the relative importance of housing attributes and
they influence consumers’ final house purchase decisions, and (3) housing attribute
preferences also vary across cities in China. Therefore, this study is one of a limited
number which examine the housing market in Wuhan.
Secondly, Priemus (1984) defined the housing market as having three parts: the
dwellings trading market, the rental housing market and the housing services provided
by suppliers. As discussed in Section 2.3.2, housing is a tangible good with
accompanying services. These offerings consist of a residential house accompanied by
services provided by housing suppliers in China. However, many previous studies
have investigated consumers’ house attribute choices, but limited research has been
conducted about both house attributes and service quality. To fully examine the
81
factors influencing home buyers’ purchase decision process, the variables in this study
cover both house attributes and service quality, not only housing attributes. This study
is useful for three groups: consumers, residential housing builders and service
suppliers. As a result of considering both house attributes and service quality,
consumers will be able to choose, buy and use residential housing and services with
satisfaction, while housing builders and service suppliers will be able to reach their
goals of higher sales and profits. The study is one of very few undertaken in Aisa,
which focus on both housing attributes and service quality.
Thirdly, segmentation of the Wuhan residential house market is another feature of this
study. The segmentation of the residential housing market in this study is based on
individuals’ demographic characteristics such as gender, age, marital status, number
of children, education, occupation, income, family size and so on. To investigate these
demographic influences on purchase decision, can help housing marketers to
comprehensively understand home buyers’ preferences across socio-demographic
sub-segments, and then enable housing companies to identify and target different
demographic market segments to better satisfy consumer needs. Some researchers
have investigated demographic influences on the housing industry in other Chinese
cities such as Beijing (Wang & Li, 2004; Han, 2010), Shanghai (Wang, Yang & Liu,
2011) and Guangzhou (Wang & Li, 2006; Li & Yi, 2007), but there has been no
research conducted in Wuhan. How and to what extent do housing purchase decisions
vary across demographic groups in the case of Wuhan? Education, for instance,
broadens a person’s horizon and helps inculcate a certain worldview. A person’s
preference structure, therefore, varies with his/her education attainment. Education
attainment is particularly instrumental in determining a person’s position in the
employment hierarchy and hence the kind of resources at his/her disposal (Blackwell
et al., 2006). Does education have the same effect on housing preference for Wuhan
residents as it has for residents in other cities? Do people of varying family size differ
systematically in terms of their views on location attributes and service quality? The
82
answers to all these questions have direct relevance for the understanding of how
housing decisions are made in China in an increasingly market driven setting. To
address these questions, the housing market study in Wuhan needs to include an
examination of demographic influences.
2.5.2 Importance and expansion of the residential housing

market in China
As mentioned in Section 2.4.1, the residential housing market is a lucrative,

fast-growing segment of China’s real estate industry and this market is considered to
have been one of fastest growing markets in China in the last two decades (Chen et al.,
2011; Tian et al., 2007; Yu, 2006). From 2000 onwards, the housing market in China
has seen a huge boost in demand due to continuous urbanisation and prolonged
economic growth. The market-oriented housing reforms in China in 1998 and the high
market demand for residential houses have caused housing prices to jump sharply in
the past ten years all over the country, and the continuously rising prices have also
stimulated this market to expand rapidly (Fung et al., 2010). Due to the influence of
the global real estate decline in 2008, the residential house market in China took a
tumble and experienced an inevitable drop after July 2007. Unlike the US and most
European markets, after a transitory two-year decline, a housing market recovery
occurred at the end of 2009 in China, and residential house prices kept rising sharply
between the later months of 2009 and 2010. Housing prices and trading volumes
reached their highest point at the end of 2010 in most of China’s main cities (China
Real Estate Statistics Yearbook 2011; Xu & Chen 2012). This market in China has
grown beyond expectations, and the saleable area continued to increase rapidly from
2004 to 2010. It exceeded 10 billion square metres of saleable area at the end of 2010,
as shown in Figure 2.18 (see next page).
Because the attraction of huge profits from the residential housing market, from 2000
onward, real estate dealers gathered capital and invested in China’s residential house
83
Figure 2.18 Saleable area of China’s residential housing market, showing the
strong growth in this market
Saleable area of China's residential housing market (ten

thousands square metres)
120000
101210.04
100000 93713.57
76192.7
80000
62088.94
55769.1 60628.1
60000
38231.64 Saleable Area
40000
20000
0
2004 2005 2006 2007 2008 2009 2010
Source: China Real Estate Statistics Yearbook 2010, 2011 &2012
market. The heavy investment in the real estate sector has provided an important
impetus for overall economic growth in China, and the housing market has gradually
become an integral part of China’s economy (Fung, Jeng & Liu 2010; Rao & Zhou
2010; Ye, Song & Tian 2010; Gan 2010). By the end of 2010, total investment in the
residential housing market reached 3,403.80 billion RMB, with an average annual
investment growth of approximately 30 per cent (as shown in Figure 2.19, see next
page), which is more than three times as much as the national GDP growth rate in the
past seven years.
The total saleable area in Wuhan is 13.40 million square metres, with an annual
average increase of 6.5 per cent from 2006 to 2011. The average housing price was
6,878.23 RMB/square metre in 2011, with an annual average increase of 12 per cent
from 2006 to 2011. The total investment in the residential house market in Wuhan was
73.70 billion RMB in 2011, with an annual average growth rate 16.90 per cent from
2006 to 2011 (China Real Estate Statistics Yearbook, 2012).
84
Figure 2.19 Total investment in the residential house market in China
Total investment in residential house

market (Billion RMB)
4000 3403.8
3000 2561.9
2208.126
1801.025
2000
1361.2 Total investment
883.895 1076.819
1000
0
2004 2005 2006 2007 2008 2009 2010
Source: China’s real estate yearbook report 2011 & 2012;

Nation Bureau of Statistic of China report 2012
In brief, China’s residential house market is undergoing a strong growth period. And
Wuhan as one of the top ten cities in China, is part of this growth. The boom in
China’s residential house industry requires a thorough understanding of home buyers’
purchase choice criteria and of their satisfaction levels with housing attributes or
performances in order to provide the right products and services to this important
segment.
2.6 Research problem: theoretical framework and

hypotheses
Previous sections profiled theories of consumer purchase decision-making in general
and in relation to residential housing in China’s housing market. From this review it is
evident that limited research has investigated the combined influence of housing
attribute preferences and service quality on home buyers’ purchase decisions and
post-purchase satisfaction. Further, no research has been conducted specifically into
the segmentation of Wuhan’s housing market.
Hence, the research problem addressed in this research is:
85
suppliers influence home buyers’ purchase decisions and post-purchase satisfaction
in China?
The associated research questions are as follows:

significantly affect home buyers’ purchase decisions in China?
evaluation of housing attributes and service choices in China?
Research question 5: Do services provided by suppliers significantly influence home
buyers' levels of satisfaction with their purchase decisions in China?
Drawing on the literature, this section proposes a theoretical framework with five
hypotheses linking the consumer purchase decision process to desirable attributes of
the products and services.
2.6.1 The proposed research model
From the research problem and empirical background provided in the previous section,
the research model shown in Figure 2.20 (see next page) was developed. The research
model draws on the last three stages of the five-stage consumer decision-making
model. The model comprises three independent variables: housing attributes, service
quality and demographics, and two dependent variables: housing purchase decision
and satisfaction level. wo sub-attributes of housing attributes and five dimensions of
service quality affect the home buyers’ purchase decisions. All of the main model
variables along with the hypotheses will be discussed in Section 2.5.3.
86
Figure 2.20 The theoretical model

Housing intrinsic
Attributes
Housing Attributes
Housing extrinsic
H4
attributes
H1
Demographic
decision Level
H5
Reliability
Responsiveness H2
H5
Housing service
Assurance
quality
Empathy
Tangibles
2.6.2 Hypothesis development
Having outlined the main research model in the last section, the next step is to discuss
the variables within the main model and the associated research hypotheses.
2.6.2.1 The housing attributes and the purchase decision (H1):
As discussed in Section 2.3.3, many recent studies use Rosen’s (1974) hedonic model
to analyse consumers’ demand for, or choice of, housing structural amenities and
attributes. These academic studies investigate residential houses as a product which is
valued for its utility-bearing attributes or characteristics or other housing purchase
factors (e.g. Bitter, Mulligan & Dall’erba 2007; Taylor 2008; Fierro et al. 2009;
87
Steimetz 2010). The potential home buyers first identify the major attributes and
benefits they need and want, and then assess the quantitative importance of each
attribute and benefit. After they estimate which attributes will deliver the most
perceived value for them, they prefer to pay money for these most valuable attributes
(Bao & Wan, 2007; Farmer & Lipscomb, 2010; Sunding & Swoboda, 2010).
Section 2.3.3.2 presented the various housing attributes which have been identified by
researchers in previous studies. In summary, there are two main attributes for
residential houses: intrinsic housing attributes and extrinsic attributes. Residential
intrinsic attributes include housing type, housing age, materials, plot size, living room,
dining room and kitchen, total bedrooms in the house, numbers of bathrooms in the
house, patio, balcony, internal layout, decorate style of the house, overall condition of
the unit, house design, growth capacity, flexibility, symbolic aspects, internal layout,
housing typology, the presence of refrigerated air conditioning, and the presence of a
garage on the property. The extrinsic factors include exterior design, exterior space,
environmental attributes, neighbourhood characteristics and location of facilities and
services (Bhatti & Church, 2004; Chay & Greenstone, 2005; Cheshire & Sheppard,
1995; Cupchik et al., 2003; Fierro et al., 2009; Greene & Ortuzar, 2002; Opoku &
Abdul-Muhmin, 2010; Pasha & Butt, 1996; Pope, 2008).
Previous studies indicate that many attributes of residential houses presented in

Section 2.3.3 can have direct or indirect, positive or negative impacts on consumers’
housing purchase choice decisions (Alonso, 2002; Bhatti & Church, 2004; Chay &
Greenstone, 2005; Fierro et al., 2009; Greene & Ortuzar, 2002; Opoku &
Abdul-Muhmin, 2010; Pope, 2008; Seko & Sumita, 2007; Spetic et al., 2005; Wang &
Li, 2006; Wilhelmsson, 2002), Furthermore, the relative importance of various
housing attributes varies across national contexts.
Hence, based the context of China in this research, the first hypothesis (H1) within the
main research model is:
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H1: Consumers’ residential housing purchase decisions in China are influenced by
housing attributes.
2.6.2.2 Housing service quality provided by suppliers and the
purchase decision (H2)
Service quality is defined by service quality theorists as the multifaceted thoughts of

the original quality gurus. The concept of service quality arose during the
development of the market discipline (Gannage, 2009; Kotler & Armstrong, 2009). In
the residential housing market, marketers provide maintenance, alterations and
conversions services to consumers and consumers perceive these service processes in
terms of interactions, activities and dynamic events (Forsythe, 2008; Nahmens &
Ikuma, 2009; Saari & Tanskanen, 2011). Consumers seek, evaluate and compare
services from different residential housing suppliers, and the quality of services
provided by suppliers also has an influence on home buyers’ purchase decisions and
post-purchase satisfaction (Torbica & Stroh, 1999 & 2001; Atterhog, 2005; Forsythe,
2008; Nahmens & Ikuma 2009; Saari & Tanskanen 2011), as discussed in Section
2.3.4.5. Five dimensions (reliability, responsiveness, assurance, empathy and
tangibles) generate 10 service quality attributes (Table 2.5), which are employed in
this research to assess service quality and measure the consumers’ purchasing
evaluative criteria.
Thus, the second hypothesis (H2) within the main research model is:
H2: Consumers’ housing purchase decisions in China are influenced by the service
quality provided by suppliers.
2.6.2.3 Demographics and purchase decision (H3)
Both individual and environmental factors influence all five stages of the consumer
buying decision process: problem recognition, searching for information, evaluation
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of alternatives, purchase decision and post-purchase behaviour (Blackwell, Souza, et
al., 2006; Quester et al., 2011; Solomon, 2009). The individual factors include
consumer demographics, personal characteristics, personality and lifestyle, motivation,
knowledge, and attitudes. Culture, social class, family and household, group factors
and personal factors are the environmental variables which can influence the
consumer decision-making process, as discussed in Section 2.2.4.1.
Demographics have a major influence on consumers’ needs and buying behaviour.

Demographic characteristics include: age, gender, education, occupation, income,
family size, lifecycle, attitude, social class and religion. These characteristics relate to
needs, wants, preferences, and usage rates, and are therefore connected with
consumption and purchasing habits (Hoyer & Macinnis, 2010; Miller, Vandome, &
McBrewster, 2010; Talloo, 2007; Zikmund & Babin, 2009; Zikmund et al., 2010).
With regard to the consumer housing preferences issue in China, some previous
researchers adopt a range of demographic characteristics that may be associated with
needs and wants of consumers in this segment of the market, as summarised in Table
2.9. Demographic characteristics including age, education, income, family size and
occupation have been investigated frequently in China’s residential housing market.
In past decades, residential housing has been the family’s largest single asset, and the
family or household is the major consumption unit for the residential house market in
China (China Real Estate Statistic yearbook, 2012) . As a result, sometimes housing
purchase decisions are made jointly by the family (Li & Yi, 2007). However, the
volume of trade in residential houses by individuals increased to 47% of total housing
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Table 2.9 Demographic Variables
Demographic
Authors Family Social
Age Gender Education Income occupation religion Total
status Class
Opoku & Abdul-Muhmin

♦ ♦ ♦ ♦ ♦ 5
(2010)
Wang & Li (2006) ♦ ♦ ♦ ♦ ♦ 5
Huang & Cheng (2010) ♦ ♦ ♦ 3
Huang (2003) ♦ ♦ ♦ ♦ ♦ 5
Total 4 1 3 4 2 4 0 0
sales by the end of 2011 (China Real Estate Statistics Yearbook, 2012). In this new
situation, this research focuses on investigating differences in the purchasing
behaviour of individuals. Therefore, demographic dimensions related to individuals’
status such as age, gender, marital status, education background, occupation, income,
number of children and family size are involved in this study.
Therefore, the third hypothesis is:

H3: Demographic variables influence consumers’ evaluation of housing attributes and
service choices in housing purchase decisions in China.
2.6.2.4 Housing attributes and satisfaction (H4)
Longenecker, Petty and Palich (2009) state that customer satisfaction should be
considered in post-purchase evaluation which includes multiple standards such as
product attributes, performances and services. As discussed in Section 2.2.3.5, in the
consumer behaviour discipline, consumers’ post-purchase processes produce customer
satisfaction and consumer loyalty (Quester et al., 2011). Customer expectations are
significantly influenced by the value received from a product and product service
encounter. The “expectancy disconfirmation with performance” approach is widely
91
used. This approach views customer satisfaction as the difference between
pre-purchase expectations and perceptions of real performance. If customers perceive
the product or service provider as performing better than expected, disconfirmation
influences satisfaction positively; conversely, if perceived performance falls short of
prior expectations, disconfirmation has a negative impact on satisfaction (Mossel &
Valk, 2008; Oliver, 1981, 1997; Peter & Olson, 2010).
Most past studies focus on home buyers’ purchase preferences of housing attributes or
relative purchase factors in the purchase decision stage; very few studies have
examined the relationship between home buyers’ perceived importance of housing
attributes and their satisfaction in the post-purchase stage. Monitoring post-purchase
satisfaction not only produces consumer loyalty and let home buyer to make repeat
purchase, but also helps housing providers to understand which housing attributes or
services can satisfy the house owners. As a result, investigating the factors influencing
house owners’ post-purchase satisfaction may help the marketers to provide the right
housing products and services to both potential home buyers and house owners who
intend to buy a second house. The fourth hypothesis of this research tests this
relationship in China’s housing market.
by their evaluations of housing attributes.
2.6.2.5 Service quality and post-purchase satisfaction (H5)
Research by Torbica and Stroh (1999 & 2001) and Forsythe (2008) suggests that the
house buyer’s and the potential buyer’s overall satisfaction are based on the total
offering from housing suppliers. This includes the main housing attributes and the
degree to which services meet consumers’ needs and wants. They find out the most
important component in shaping overall home-buyer satisfaction is services provided
by housing suppliers. Similarly, according to the survey by J.D. Power and Associates
of Central Florida in 2007, the following aspects of housing can significantly
92
influence house buyers’ expectations of their new house: housing structure, housing
sales dealer, workmanship, housing construction, materials, price and appreciation
value. The services provided by sale staff and daily housing maintenance services
after sales were the most important two contributors to meeting householders’
selection criteria and overall satisfaction in Florida. Housing suppliers try to find out
what end customers perceive as important for their satisfaction for component
services, and investigate whether the suppliers give sufficient attention to these
characteristics in their service specifications. The service suppliers need to identify
and understand home-buyer needs in order to constantly improve service quality. To
create loyal customers and keep competitive advantage, many housing companies
monitor satisfaction, make changes in their operations, and exceed consumers’
expectations (Nahmens & Ikuma, 2009). This discussion leads to the fifth hypothesis:
by their evaluations of the service quality provided by suppliers.
Identifying the housing attributes that home buyers perceive as important in their
purchase decisions, and the features that lead to home buyers’ post-purchase
satisfaction, will help housing marketers to make better decisions on residential
housing industry development in China.
Table 2.10 (see next page) gives a summary of the variables used in this study. The
related literature from which the variables are derived is also shown. The 33 housing
attributes and the 10 service quality attributes are independent variables in this
research. This thesis aims to investigate how home buyers’ purchase decisions and
post-purchase satisfaction are influenced by these 43 attributes. In addition, the eight
demographic variables are employed to examine how purchase behaviour varies
across socio-demographic sub-segments of the research sample.
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Table 2.10 Summary of the variables and related literature in the hypotheses
Variables Related literature

1) Intrinsic housing attributes
1. Dwelling type
2. Area of structure of the house
3. Age of the house

Dale-Johnson & Phillips (1984);
4. Size of living room
Greene & Ortu´zar (2002); Cupchik,
5. Size of kitchen and dining room
Ritterfeld, & Levin (2003); Wang &
6. Number and size of bedrooms
Li (2004, 2006); Bitter, Mulligan &
7. Number and size of bathrooms
Dall’erba (2007); Opoku &
8. Availability of storage room
Abdul-Muhmin (2010);
9. Layout & decorate style
10. Architectural materials
11. Housing price
12. Payment in terms
2) Exterior design and space
13. The appearance of the house/building Pasha & Butt (1996); Bhatti &
14. Presence of garden and size of garden Church, 2004; Greene & Ortu´zar’s
15. External walls (2002)
16. Exterior spaces
3) Environment attributes Blomquist & Worley (1981);

17. Air quality of the living area
McConnel et. al (1985); Phipps
18. Surrounding noise
1987; Arimah (1992); Cheshire &
19. Width of road and passages
Sheppard (1995); Rojas & Greene
20. Greenery of adjacent street
1995; Pasha and Butt (1996); Fierro,
21. Rain water drainage system
Fullerton & Donjuan-Callejo
22. Street lighting
(2009); Opoku & Abdul-Muhmin
23. Presence of footpath (2010)
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4) Location attributes
24. Location close to schools and nurseries
25. Location close to health centre and hospital
26. Location close to shopping centre

Pasha & Butt 1996; Zabel & Kiel
27. Location close to food court
(2000); Chay & Greenstone (2005);
28. Location close to sports facilities, library, and social
Pope (2008); Yusuf & Resosudarmo
activities centres etc.
(2009); Opoku & Abdul-Muhmin
29. Location on a main street
(2010); Wang & Li (2006)
30. Location on a downtown street
31. Location close to public transport
32. Location close to workplace
33. Location close to other community services
5) Service quality provide by the suppliers
34. Providing service as promised
35. Dependability in handing home buyers’ service
problems
36. Readiness to respond to home buyers’ requests
37. Secure housing transaction is important to home buyers.
38. Employees who are consistently courteous Parasuraman, Zeithaml & Berry
39. Employees having the home buyers’ best interests at (1985); Forsythe 2008; Nahmens &
heart Ikuma 2009; Kotler & Armstrong
40. Employees who understand the needs of their home 2010; Saari & Tanskanen 2011
buyers
41. Convenience of service office hours influence home
buyers to purchase
42. Employees who have a neat, professional appearance
43. Availability of after sales service
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6) Demographics
1. Gender
2. Age
3. Marital status
Wang & Li (2006); Opoku &
4. Educational background
Abdul-Muhmin (2010); Huang
5. Occupation
(2003); Huang & Cheng (2010)
6. Family total disposable income per year
7. Number of children
8. Family size
7) Overall satisfaction Oliver 1981 & 1997; Quester,
Pettigrew & Hawkins 2011;
Nahmens & Ikuma 2009
8) Purchase decision Wang & Li (2006)

Fierro, Fullerton & Donjuan-Callejo
(2009)
2.7 Conclusion
This chapter reviewed the literature that focuses on consumer purchase decision
processes, and the attributes and services which influence purchase decisions of home
buyers. The five-stage purchase decision processes were discussed, followed by a
review of home buyers’ purchase behaviour across the country. The literature review
conducted here has revealed gaps in the research into home buyers’ purchase
decisions and post-purchase satisfaction with both housing attributes and services in
the Wuhan’s residential housing market. It then developed theory-based models to
develop hypotheses in this research. Five hypotheses were developed and presented
within one main theoretical model showing the interrelationships between them. The
next chapter will explain the methodology used and how the research was conducted
to address the research problem.
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CHAPTER 3 RESEARCH METHODOLOGY
3.1 Introduction
The aim of Chapter 3 is to outline the research methodology. This chapter is divided
into eight sections: introduction; survey research method; questionnaire design;
sampling; survey ethics and administration of survey; data analysis processes;
limitation of the proposed research design; and conclusions. The outline of the chapter
is presented in Figure 3.1.
Figure 3.1 Outline of Chapter 3
Chapter three: Research

methodology
3.1 Introduction
3.2 Survey research method
3.3 Questionnaire design
3.4 Sampling
3.5 Survey ethics and

administration of survey
3.6 Data analysis processes
3.7 Limitation of the proposed

research design
3.8 Conclusion
Source: developed for this research
97
The theoretical framework was developed from a review of the literature and was
applied to the Wuhan housing market. The theoretical framework is presented in
Figure 3.2.
Figure 3.2 The theoretical model

Housing intrinsic
Attributes
Housing Attributes
Housing extrinsic
H4
attributes
H1
Demographic
decision Level
H5
Reliability
Responsiveness H2
H5
Housing service
Assurance
quality
Empathy
Tangibles
This model suggests that there are three independent variables (housing attributes
including two sub-attributes, housing service quality and demographics) in the main
model. This model also shows that there are five dimensions of service quality which
affect the home buyers’ purchase behaviour. The framework aims to investigate the
relationship between the three independent variables and the dependent variable –
housing purchase decisions. Satisfaction is another dependent variable which has been
added to examine consumers’ feelings about their purchase decisions based on their
assessment of housing attributes and service quality.
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A quantitative research method was chosen to test the five hypotheses for the
following reasons: Firstly, the selected positivist paradigm is best suited to a
quantitative methodology. Secondly, the goal of this study is to test the hypotheses
derived from a broad research problem, examining the relationships between variables
in the research model. Thirdly, quantifiable measurements of the variables are
possible, and inferences can be drawn from a large sample of a population. Lastly, all
the variables in this research can be quantified and measured. The seven-point Likert
scale in the survey can indicate home buyers’ purchase attitudes, and the respondents’
answers can be expressed as numbers. All the data collected by mail survey have been
transformed into numbers.
Thus, a quantitative research methodology was the most appropriate one for this study
and it was employed in this research by collecting and analysing data in terms of
numbers. Quantitative methods include surveys, experiments and secondary data
analysis. The next section justifies the choice of the survey research method.
3.2 Survey research method

The objective of this thesis is to find out which housing attributes and which services
provided by housing marketers influence home buyers’ purchase decisions in Wuhan.
Secondary data relative to this topic from previous research can only answer some
particular questions, These existing secondary data sources are inappropriate for this
research. For example, many housing attributes were omitted in past statistical reports,
the existing secondary data cannot cover all the variables in this study, and the data do
not exactly meet the researchers’ needs. Experimental research has practical
constraints, such as narrow scope. Therefore, neither experimental research nor
secondary data analysis are suitable for this study. This research collects data from
Wuhan home buyers. The target population is huge – approximately 9.8 million and
this research also intends to use primary data to test the hypotheses; thus, survey
research is best suited for this goal.
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This section discussed the types of survey instruments and presents a justification for
the use of a mail questionnaire as the primary data collection method.
3.2.1 Survey instruments
This section discusses types of survey instruments. The advantages and disadvantages
of each survey instrument will be explained. There are two methods to gather survey
data: (1) inviting individuals to answer questions from interviewers and (2)
questionnaires. The methods for collecting primary data, include personal interviews,
telephone interviews, and self-administered questionnaires (including mail
questionnaires, hand-delivered questionnaires, fax surveys, e-mail surveys, and
internet surveys) (Zikmund et al., 2010).
3.2.1.1 Interviews
One method of collecting data is to interview respondents to gather information on the

issues of interest. An interview is a conversation with a purpose between the
interviewer and the respondent (Sekaran & Bougie, 2009). The two main types of
interactive interviews are face-to-face interviews and a telephone interviews.
A personal interview is a form of direct communication between the interviewer and

the interviewee, in which the interviewer asks respondents questions face-to-face. It is
a two-way conversation initiated by an interviewer to gather information from an
interviewee (Zikmund et al., 2010). The interviewer can control the topic and pattern
of the discussion to confirm the accuracy of the feedback from respondents by
clarifying respondents’ doubts, asking for clarification or expanding on a specific
response. One of the most important advantages of face-to-face interviews is that deep
and detailed information can be gathered. However, face-to-face interviews are
expensive and time-consuming, so they are only suitable for research which focuses
on a small sample. Another disadvantage of personal face-to-face interviews is that
100
when asked sensitive questions, some persons may be reluctant to provide
confidential information because the interviewees are not anonymous (Sekaran &
Bougie, 2009). In this research, the research interviewed some experts who worked in
Wuhan residential housing market companies to weigh the different attributes of the
available housing.
3.2.1.2 Questionnaire-based surveys
A questionnaire is a pre-formulated written set of questions to which respondents

record their answers, usually using closely defined alternatives (Sekaran & Bougie,
2009). Questionnaires are used to collect primary data with maximum reliability
(Babbie, 2010). In business research, researchers distribute questionnaires to
consumers through the mail or in other ways.
A personally administered questionnaire is used when the survey is confined to a

local area, and the organisation where the survey is being conducted is willing and
able to assemble groups of employees to respond to questionnaires at the workplace.
In this situation the questionnaire is conducted and completed in person. Respondents
with any doubts about the questions can have them clarified on the spot, and
researchers can collect the completed responses within a short period time. However,
it is impossible to employ personally administered questionnaires when the sample is
widely spread due to the large cost and the time required. In addition, many
organisations are disinclined to allow work time to be spent on data collection
(Sekaran & Bougie, 2009).
A mail survey is a self-administered questionnaire which collects data by sending the

questionnaire and receiving answers through the mail. Mail surveys can reach a wide
geographical area and are inexpensive compared to personal interviews. Mail
questionnaires are anonymous, and can be filled out by the respondents at their
convenience. Their most significant disadvantage is the low response rate.
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Researchers always send follow-up letters, and provide self-addressed, stamped return
envelopes to ensure a higher response rate. Mail surveys are most suitable when the
sample is widely dispersed and the budget is limited (Zikmund et al., 2010).
3.2.2 Justification of the data collection method – mail

questionnaire-based survey
In previous studies related to this research, many researchers adopted mail surveys to
collect primary data to investigate housing attributes preferences (e.g. Greene &
Ortuzar, 2002; Wang & Li, 2006; Opoku & Abdul-Muhmin, 2010). Compared with
the other data collection methods described above, a mail questionnaire-based survey
is the most suitable method and was selected for this research for the following
reasons:
1. It was an efficient method to collect primary data about the widespread population
of Wuhan.
2. The statistical problems in this research are unavoidable without very large samples
(> 400). Thus, the sample size had to be large. The sample size was set at around 400.
Hence, a mail questionnaire was possible and feasible for this study.
3. A large number of responders could be reached at a relatively low cost, and
researcher time involvement was low compared to telephone interviews, face-to-face
interviews and personally administered questionnaires.
4. Respondents could complete this survey at their convenience. This allowed
respondents to gather the necessary information to give thoughtful answers, resulting
in reduced errors and biases (Creswell, 2009).
5. Respondents are more likely to provide sensitive or embarrassing information when
they can remain anonymous (Zikmund et al., 2010). Mail surveys can meet this
requirement.
6. There are some effective measures to increase response rates for mail surveys, such
as interesting cover letters and question design, follow-up letters, and providing
self-addressed, stamped return envelopes (Sekaran & Bougie, 2009).
102
3.2.3 Limitations of the survey research method
Although Section 3.4.2 presented several advantages of the survey research method,
some limitations also exist. The main limitations are:
1. Poorly worded questions may lead to ambiguous responses, which cause some
unclear data results.
2. The accuracy of responses is contingent on the willingness of participants to answer
truthfully and completely.
In order to resolve these problems the following measures were adopted (Sekaran &
Bougie, 2009):
1. All the surveys were sent to a sample of Wuhan’s potential home buyers and house
owners who were members of Wuhan residential housing companies. All of the
members were chosen by employing a stratified random sampling procedure based on
location of residence. The expected sample size was set at around 400 to avoid
statistical problems (Zikmund et al., 2010).
2. The researcher had discussions with experts who worked in Wuhan residential
housing companies to weigh the different attributes of the available housing. These
experts were from different professional realms working in the social housing field,
and all of them had worked in Wuhan’s housing industry for more than ten years. Also,
a pilot study was undertaken, and the feedback from this pre-test helped the researcher
in reviewing the wording of questions.
3. Ethical issues were considered carefully in this study. All of the returned
questionnaires were submitted voluntarily by participants, and the questionnaire
design avoids potentially sensitive questions and gives the informants the choice of
not answering any uncomfortable questions.
3.3 Questionnaire design

Questionnaire design in survey research is very important. Basically, problem
103
definition and objectives influence questionnaire design (Zikmund et al., 2010). This
section has been divided into four sections to explain the questionnaire design process,
which included question development, question and response formats, scales of
measurement and physical characteristics. Each step will be discussed below. Based
on the literature review, this questionnaire contained only questions that were directly
relevant to the research questions.
3.3.1 Questions in the questionnaire
Table 3.1 gives a summary of the variables found in the questionnaire. All of these
variables were chosen based on the literature review chapter. The related literature
from which the variables are derived is also shown. In order to gather more accurate
answers and increase the response rate, the objective was to make the questionnaire
clear and simple (Sekaran & Bougie, 2009). The study aims to measure respondents’
perceived importance of housing attributes, as well as their attitudes toward service
quality. Attributes per se are not measured in this research, as this was not an
observation or field study. The variables and questions are detailed in Table 3-1 (see
next page).
3.3.2 Question development
There are two sections in the questionnaire. Every question in the questionnaire is
based on the literature review in Chapter 2. The first section of the survey is about
home buyers’ opinions. This section includes seven questions about intrinsic attributes,
exterior design and space, environment attributes, location facilities and services, the
service quality dimensions, purchase decision and post-purchase satisfaction level.
This section was used to measure the influence of the five housing purchase factors on
home buyers’ purchase decisions and post-purchase satisfaction. The second section is
background information. It provided information about respondents’ demographic and
socio-economic characteristics. (See questionnaire in Appendix 1). All of the answers
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Table 3.1 Summary of variables in the questionnaire
Number of Items in the

Variables Items
items Questionnaire
·Dwelling type (apartment, duplex and villa)
·Floorspace of the house
·Age of the house
·Size of living room
·Size of kitchen and dining room

1) Intrinsic
·Number and size of bedrooms Questions
housing 12
·Number and size of bathrooms 1.1-1.12
attributes
·Availability of storage room
·Layout & style of the house
·Architectural materials
·Housing price
·Payment in terms
·The appearance of the house/building
·Presence of garden and size of garden Questions

2) Exterior
4 ·External walls 2.1-2.4
design and space
·Exterior spaces (i.e. public areas such as the
public aisle, elevator, recreation room)
·Air quality of the living area
·Surounding noise
·Width of road and lanes Questions

3) Environment
7 ·Greenery of adjacent street 3.1-3.7
attributes
·Rain water drainage system
·Street lighting
·Presence of footpath
4) Location ·Location close to schools and nurseries Questions

10
attributes ·Location close to health centre and hospital 4.1-4.10
105
Variables Items
items Questionnaire
·Location close to shopping centre
·Location close to food court
·Location close to sports facilities, library, and
social activities centres etc.
·Location on a main street
·Location on a downtown street
·Location close to public transport
·Location close to workplace
·Location close to other community services
such as refuse collection, public phone
·Providing service as promised
· Dependability in handling home buyers’
service problems
· Readiness to respond to home buyers’
requests
·Secure housing transaction
·Employees who are consistently courteous

5) Service quality
·Employees having the home buyers’ best Questions
provide by the 10
interests at heart
5.1-5.10
suppliers
·Employees who understand the needs of their
home buyers
·Convenience of service office hours
influence home buyers to purchase
· Employees who have a neat, professional
appearance
· Availability of after sales service
6) Purchase 1 ·Have you purchased residential house(s)? Question 6
106
Variables Items
items Questionnaire
decision (Yes/no)
7) Overall ·Overall, how would you rate your house as a

1 Question 7
satisfaction good buy?
·Gender:
·Age
·Marital status
·Educational background Questions

8) Demographic 8
·Occupation 8-15
·Family total disposable income per year
·Number of children
·Family size
of the two sections were employed for the data analysis described in Chapter 4.
3.3.3 Question and response formats
There are two major types of response formats: open-ended (unstructured) and closed
(structured) (Neuman, 2010). Both formats are employed in this study and details are
discussed below.
Open-ended questions are designed to encourage responders to answer the questions

with full, meaningful words using their own knowledge or feelings. Closed questions
limit the possible answers by providing the respondent with options from which to
select a response. Scale-response questions are closed questions. They use numbers
assigned to identify categories or rank order, or to identify equidistant points on a
scale. Scaled-response questions measure opinions of responders directly by using
scales (Neuman, 2010). In the questionnaire in this study, Question 16 which asks
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respondents for additional comments, is open-ended; Questions 6, 8, 9, 10, 11, 12, 13,
14 and 15, which gather information on respondents’ purchase decisions and
socio-economic characteristics, are closed questions; and Questions 1, 2, 3, 4, 5, and 7,
which are attitude measurement questions, are scaled-response questions. The
disadvantages of the question forms can be reduced by using a mixture of open-ended
and closed questions (Neuman, 2010), making it possible to collect more complete
and accurate information.
3.3.4 Level of scales measurement
There are four levels of scale measurement: nominal, ordinal, interval, and ratio scales.
Each of them is discussed below.
A nominal scale uses numbers to label, classify or identify people or objects of

interest (Creswell & Clark, 2011). Nominal scales are employed in the background
section of the questionnaire to identify the respondents’ gender and marital status.
An ordinal scale of measurement is capable of categorising information, it arranges

objects based on their magnitudes, and the data are capable of being ordered (Neuman,
2010). In the questionnaire of this study, a seven-point Likert scale is used to measure
attitudes. The Likert scale is a psychometric scale commonly used in research that
employs questionnaires to measure respondents’ attitudes. It has been the most widely
used approach to scaling responses in survey research since the 1930s (Miller,
Vandome, & John, 2010). A seven-point Likert scale has three negative, three positive
and one neutral response. Because a seven-point Likert scale offers more options than
a five-point scale, it provides a higher degree of reliability (Miller, Vandome, & John,
2010). Seven-point scales have been used in past studies related to housing choice
(e.g. Fierro et al., 2009) and have also been applied in this study. The seven-point
scale was considered to have enough spread to differentiate extreme responses.
An interval scale indicates there is an equal distance between adjacent numbers as
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well as preserving the property of ordinality (Creswell, 2009). An interval scale is
used to investigate respondents’ ages and incomes in the background section.
A ratio scale has a true zero point when a given object is absent. It is the scale that has
absolute rather than relative quantities (Creswell, 2009). A ratio scale is applied to ask
whether respondents purchased residential house(s).
3.3.5 Physical characteristics
Careful design of the questionnaire can increase response rates in mail surveys
(Marsden & Wright, 2010). The physical layout of the questionnaire is presented in
the Appendix 1 and Appendix 2. The questionnaire was designed and printed on A4
paper and in 12-point type. Keywords are italicised, and the cover sheet contained the
title of the survey with a graphic illustration. All of the above features can attract the
respondents’ attention (Lavrakas, 2008; Marsden & Wright, 2010). In addition, this
questionnaire was translated into Chinese (see Appendix 2) to avoid language
problems.
3.4. Sampling
A sample is a subset of a population. Sampling is a procedure that collects data from
some members of a given population as a basis for drawing conclusions about the
whole population (Sekaran & Bougie, 2009). Sampling is employed when the
population is too large to conduct surveys on everyone; the purpose of sampling is to
estimate an unknown characteristic of a population (Zikmund et al., 2010). It was
impossible to cover all house owners and potential home buyers in Wuhan. Hence,
this section identifies the sample frame, sample size and design of the sample.
3.4.1 Target population
The target population refers to the total group of people, events or things that the
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researchers want to investigate. Individuals in the population share some common sets
of characteristics (Sekaran & Bougie, 2009). The population in this research consisted
of all potential home buyers and house owners who live in Wuhan, a city with a
population of approximately 9.8 million persons. It would have been impossible to
cover the whole target population in this research.
3.4.2 Sampling frame
The sampling frame is a physical representation of all the elements in the population
from which the sample is drawn (Sekaran & Bougie, 2009). There are 20 major
residential housing companies in Wuhan (See Appendix 3). These 20 companies
account for more than 90 per cent of the residential housing market in Wuhan (Wuhan
Statistical yearbook, 2011). Wuhan Di Chan Group Company, Wuhan Fu Xing Huiyu
Ltd, and Wuhan An Ju Engineering Group are the top three housing developers. Many
residents in Wuhan registered as members of these companies to gain some advantage
in house purchasing. For example members are able to get more accurate residential
housing information, preferential prices and more quality services when they purchase
a house (China Real Estate Statistics Yearbook, 2011).
These companies had more than 27,000 members by the end of 2011. Of these, 52.53%
members were male, and 47.47% were female. These individuals engaged in all kinds
of work in Wuhan, from government employees to private business employees, from
public service providers to business owners. The age range was from 18 to 74 (Wuhan
Housing and Land Resource Administration, 2011). In this research, the sample frame
was all the persons who were registered as members of the Wuhan residential housing
companies. The member lists were developed by the residential housing companies
that had already received permission from consumers (both potential home buyers and
house owners) to provide information on name, address and contact telephone
numbers for further survey purposes.
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3.4.3 Sample size
Sample size refers to the number of observations to be investigated in the research.

The exact size of the sample required depends on the budget of the research,
knowledge of the variability within the sample, the degree of confidence and
precision of outcome needed (Babbie, 2010; Patil, Gore, & Taillie, 2011). Statistical
problems are unavoidable without very large sample size (> 400) (Zikmund et al.,
2010). Setting sample size at around 400 is considered appropriate in a business study
and gives almost the same accuracy in a population of 200 million as it does in a
population of 4,000 (Cooper & Schindler, 2010). Moreover, in order to improve
precision for multivariate analysis, the critical sample size is between 300 and 500
(Cooper & Schindler, 2010). Wuhan is a large city with a population of approximately
9.8 million. Therefore, the researcher employed a stratified random sampling
procedure (see Section 3.4.4). With a 95% confidence level and a ±5% confidence
interval, the sample size needed is 384. Thus, the researcher set the sample size at
around 400, with a 95% confidence level and a ±4.9% confidence interval. This is
appropriate, given the large population of Wuhan.
Low response rates are the major problem in mail surveys, and a 30 per cent response
rate is considered acceptable (Creswell & Clark, 2011). To ensure there were around
400 completed questionnaires, 2000 questionnaire were sent (to allow for a response
rate which might be low as 20 per cent) to residential housing company members who
were selected at random (details of sampling design in Section 3.4.4).
3.4.4 Selection of sampling design – stratified sampling
There are two main types of sampling design in business research: probability
sampling and non-probability sampling. In probability sampling every element in the
population has an equal chance or has a known chance of being selected as a subject
in the sample. Non-probability sampling is employed when the elements in the
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population do not have an equal chance, or some of the elements have an unknown
chance of being selected as sample subjects (Sekaran & Bougie, 2009).
The sampling design in this research was a procedure that collected data from some
members of a given population as a basis for drawing conclusions about the whole
population. However, the findings from non-probability sampling cannot be
confidently generalised to the whole population. Probability sampling design can
achieve this goal and has been selected in this research.
Stratified sampling is one type of probability sampling, and it was selected in this
research to collect data for the following reasons:
1. Selecting 100 individuals from each company made it possible to gather valuable
information from each company group. Stratified sampling ensured the outcome from
the sample could be confidently generalised to the population (Fuller, 2011).
2. Stratified sampling is more efficient than simple random sampling for this research,
(Fuller, 2011). Stratified sampling procedures based on member lists of each housing
company saved time for the researcher.
The researcher obtained the member lists from all 20 housing companies in Wuhan.
More than 13,000 members’ names and contact details presented on the lists. Finally,
a total of 2000 members (2000/13,000 = 15.38 per cent) were selected randomly from
these lists, with 100 members per company. These 2000 individuals were set as the
sample of this research.
3.4.5 Pilot study
A pre-test was conducted after designing the questionnaire. A pilot study is a

collective term used for small-scale precursors to large surveys. It refers to any
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small-scale research technique that uses sampling but does not apply thorough
standards (Zikmund et al., 2010). The pilot study is conducted before the
administration of the actual questionnaire to detect weaknesses in design and
instrumentation and provides alternative data for the selection of a probability sample.
The major purpose of the pilot test is to evaluate questionnaire items and to assess the
suitability of the wording, layout, response rate and sequence of questions (Cooper &
Schindler, 2010).
A pilot study was undertaken with the Union Hospital in Wuhan in May 2012. This
hospital is located in downtown Wuhan and is near to some of the largest housing
companies such as the Wuhan Di Chan Group and Wuhan Fu Xing Huiyu Ltd. The
hospital has more than 2,000 employees many of whom are members of Wuhan
housing companies. Forty copies of the questionnaire (10 per cent of the sample of
400) were handed out randomly to employees who were members of Wuhan housing
companies. The pilot study was used to test if there were problems associated with
respondents’ interpretations of the questions or with the responses required. The
questionnaire was translated into Chinese by the researcher (discussed in Section 3.7).
From the pilot study, the researcher found the biggest problem was the length of the
questionnaire. The initial questionnaire was nine pages long and took too long to read.
Therefore, the researcher used simpler words and deleted some formal words in the
cover page. The revised questionnaire was six pages long and only took an estimated
10–15 minutes to complete. Another problem was some respondents could not
understand technical terms for housing attributes, such as exterior design and space.
Hence, explanations of technical terms were added at the end of the questions to avoid
ambiguity, vagueness and confusion (Neuman, 2010).
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3.5 Survey ethics and administration of survey
Ethics and administration are other issues in survey research (Neuman, 2010).
3.5.1 Survey ethics
One of the important considerations a researcher must attend to is the ethics of their
research (Neuman, 2010). At the macro level, the fundamental principles for ethical
protocols and application procedures within universities are:
·informed consent
·honesty
·no conflict of interest, all possible conflicts of interest must be declared by the
researcher
·privacy
·non-maleficence (Burton & Steane 2004).
Informed consent involves the researcher clearly explaining to the participants: the
research purpose, research process, research risks, research benefits, and how the
findings will be used and reported. The documented agreements are written up in
consent forms, which should be clear, fair and non-exploitative (Mertens & Ginsberg,
2009; Pimple, 2008). In this research, the research purpose, procedure and how the
findings were to be used and reported were clearly explained to participants at the
beginning of the survey, using a covering letter. Respondents were asked in a covering
letter if they were willing to fill out the questionnaire. Data collection was limited to
the those willing to consent to participation. In fact, the research plan posed negligible
risk to participants. The letter stated that the survey results would not be misused
(Malhotra, 2010). The letter also stated that the findings of the research would be of
benefit to housing builders/service suppliers who need a thorough understanding of
home buyers’ purchase choice criteria and their levels of satisfaction with housing
attributes and performance, in order to provide the right products and services to
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home buyers.
Participation in research studies has been considered one part of their social obligation
by citizens in many countries (Burton & Steane, 2004). The researcher should be
honest and they must not coerce or trick anyone into participating in the research
(Mertens & Ginsberg, 2009). In social research, the question of harm arises in the use
of data rather than in the collection process (Malhotra, 2010). Based on
responsibilities to participants, the researcher must ensure the right of participants to
privacy and they should not be harmed. In this research, the prior questionnaire design
avoids potentially sensitive questions, and all of the returned completed
questionnaires were entirely the voluntary work of the participants.
Conflicts of interest can negate the integrity of a decision or process (Neuman, 2010).
In some research, the conflict of interest problem might compromise the research
integrity as well as the safety of research subjects (Neuman, 2010). In this research,
the integrity of the informed consent process was clearly demonstrated, and the
findings of this research offer potential benefits to both home buyers and housing
builders/service suppliers.
The terms privacy and confidentiality are often used synonymously and are central
ethical concerns in research. Informed consent from the participants was considered
important, because gaining the participants’ trust and cooperation is a necessary
condition for the collection of relevant and accurate research data (Mertens &
Ginsberg, 2009). The participants were not asked to give their name or any other
identifying information and every respondent had the right to refuse to answer any
question in the survey. Also, to protect residential house/service providers’ reputations
the researcher kept all personal information strictly confidential.
The researcher is obligated to avoid harming anyone in the process of their research,
thus, non-maleficence is the key aspect of ethical considerations (Mertens &
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Ginsberg 2009). Researchers need to respect the dignity of participants by honouring
privacy, by being honest, by being mindful of the effects of findings and by trying to
maximise possible benefits as much as humanly possible (Neuman, 2010).
The guidelines of the Southern Cross University Human Research Ethics Committee
(HREC) were adopted for the survey questionnaire. The HREC considered and
approved the research proposal associated with this research. Hence, the entire
research process was scrutinised by an appropriate ethics authority.
The research aimed to ensure adherence to all ethical considerations at the primary
research stage. A fundamental ethical consideration is that potential participants be
made aware of the nature and purpose of the research. Each respondent was advised
by covering letter of the purpose of the research, the topic and expected outcomes and
distribution of the results. The covering letter outlined the voluntary nature of the
survey, as well as the promise of confidentiality and anonymity. The Approval
Number of this research by Southern Cross University Human Research Ethics
Committee (HREC) was: ECN-12-142.
In brief, ethical issues were considered carefully at all stages in this research process.
3.5.2 Administration of survey
After the pilot study, 2000 revised surveys were sent by mail in June and July 2012 to
a sample of Wuhan potential home buyers and house owners who were members of
Wuhan housing companies. All members were chosen by employing a stratified
sampling procedure based on each of the 20 companies’ member lists. One hundred
participants were selected from each company. The questionnaire was designed and
printed on A4 paper and in 12-point type. Keywords were italicised, the questionnaire
cover sheet contained the title of the survey with a graphic illustration to attract
respondents’ attention. In addition, in order to obtain a higher response rate,
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self-addressed and stamped return envelopes were included for respondents to return
the completed survey to the researcher.
A total of 478 questionnaires were returned by the end of August, yielding a response
rate of 23.9 per cent. Opoku and Abdul-Muhmin (2010), and Fierro et al. (2009), who
also used mail surveys in their housing purchase decision studies, obtained response
rates of 39.4 per cent and 24.6 per cent respectively. Normally, a 20 per cent to 30 per
cent response rate for mail questionnaire-based surveys is considered acceptable
(Zikmund et al.). The response rate in this research was therefore acceptable.
In this study, the volume of returned surveys achieved the expected volume, and so a
follow-up survey strategy was not necessary.
3.6 Data analysis processes

After data were gathered, the next step was to edit and code the questionnaire
responses, dealing with incomplete answers or omissions, transforming and
transcribing, cleansing the data, and finally, typing the key data into software
programs for analysis (Cooper & Schindler, 2010; Malhotra, 2010). Each step in the
data analysis is discussed below.
3.6.1 Data processing
Editing data is the process of checking data for omissions, consistency and legibility,
in order to increase accuracy and precision (Cooper & Schindler, 2010). The task of
researchers in this stage is to check for errors and omissions in the data, and then to
adjust the data so that it is complete, consistent and readable.
Coding data is the practice of assigning numerical scores or classifying symbols to

the edited data. In quantitative research, the data are generally coded simply by using
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the number corresponding to the choice selected by the respondent (Cooper &
Schindler, 2010).
Data transformation is a variation of data coding. It is the process of changing the

original numerical representation of a quantitative value to another value. The purpose
of data transformation is to convert survey responses into a form that can be analysed
by computer and to avoid problems in the data analysis process (Malhotra, 2010).
Through the above three stages, the key data of the research were typed into the
software program for analysis. The data in this study was entered into the Statistical
Package for the Social Science (SPSS) software to analyse the outcomes. The next
section briefly introduces the SPSS software.
3.6.2 SPSS 20.0
Data analysis processes in survey research is usually done using computer programs
due to the large amount of data involved. Many software programs like SPSS, Excel,
SAS, STATPAK and SYSTAT are available for quantitative data analysis (Creswell,
2009). SPSS is the most widely used software program for the analysis of survey data,
as it offers a wide range of data analysis products from data collection, analysis and
modelling to report presentation. Thus, SPSS v20.0 was chosen for this study.
3.6.3 Reliability and validity
The quality of a survey is mainly measured in terms of reliability and validity, which
are important in establishing the credibility of the research (Zikmund et al., 2010).
Reliability is an indicator of a measure’s internal consistency. A measurement can be
considered reliable when it is free from error and presents the same results over time
and across items (Sekaran & Bougie, 2009). Four procedures were employed to
increase the reliability of this research: firstly, developing clear concept constructs in
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the literature review chapter; secondly, using the seven-point Likert scale in the
questionnaire to investigate home buyers’ attitudes; thirdly, using multiple indicators
of a variable to enhance research reliability; and lastly, employing the pilot test for
specific pre-testing.
There are three main methods to measure reliability: the test-retest, split-half
reliability, and equivalent-form methods. The test-retest method administers the
same instrument or measures to the same respondents at two different times to test for
stability. The split-half method takes one half of the items of the scale and checks
them against the results from the other half. The equivalent-form method employs
two alternative instruments to measure equivalency (Zikmund et al. 2010). To
estimate a multiple-item scale’s reliability, the most common statistical test is
Cronbach’s coefficient (α). Cronbach’s coefficient (α) is an index of the internal
consistency of the items’ tendency to correlate with one another. It ranges in value
from 0 (no reliability) to 1 (perfect reliability). A high alpha coefficient indicates that
the item of an observed variables test correlates well with the true scores. In some
studies, modest reliability in the range of 0.50 to 0.60 will suffice (Hair & Anderson,
2010; Zikmund et al., 2010). As the output of Section 4.3.3 shows, Cronbach’s Alpha
for essential housing attributes was 0.589, and for aesthetics it was 0.637, and
Cronbach’s Alpha for all the other composite variables exceeded 0.70. Therefore,
these composite variables were reliable for this research.
Validity is the accuracy of a measure or the extent to which a score truthfully

represents a concept. There are four approaches to examining validity: face validity,
content validity, criterion validity, and construct validity (Neuman 2010; Zikmund et
al. 2010).
Face validity is agreement among professionals that a scale logically reflects the
concept being measured. Content validity refers to the degree to which a measure
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covers the domain of interest (Neuman, 2010). In this research, the questionnaire was
developed in the framework provided by the literature review with specific items as
listed in Section 2.3.3.2 in Chapter 2. Moreover, the researcher had discussions with
experts who worked in Wuhan housing companies to weigh the different attributes of
the available housing. In addition, a pilot study was conducted to test the
questionnaire. Feedback from the pilot study helped the researcher to review the
wording of questions.
Criterion validity refers to the ability of a measure to correlate with other measures
of the same construct (Neuman, 2010). Construct validity refers to the degree of
confirmation of the network of related hypotheses developed from theory on the basis
of the concepts (Zikmund et al., 2010). In the data analysis chapter, construct validity
is tested by examining whether measures correlated with other measures of the same
constructs through factor analysis (discussed in Section 4.3).
3.6.4 Descriptive statistics
Descriptive analysis is the elementary transformation of data in a way that describes

basic characteristics such as central tendency, distribution, and variability of the
population or sample (Zikmund et al., 2010). The survey in this research includes
several items relating to home buyers’ attitudes towards housing attributes and service
quality, and their demographic details.
The first step of descriptive statistics in this research provides initial summary data on
the demographics and essential features of the sample. Descriptive statistics calculate
the numbers of respondents falling into each category, which including gender, age,
highest educational qualification, occupation, income level, family status, and the
number of responders who made/did not make a purchase decision.
After the factor analysis generates ten new composite variables, the second step of
descriptive statistics in this research calculates the maximum, minimum, means,
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standard deviations, and variance for the respondents attributes towards each
composite variables, housing attributes, service quality items, and the respondents
attitudes towards their post-purchase satisfaction.
3.6.5 Inferential statistics
Inferential statistics consists of procedures used to make inferences about population

characteristics from information contained in a sample drawn from this population.
Inferential statistics always include analysing and verifying research hypotheses about
the relationships or differences between variables in a population, which are based the
sample statistics (Mendenhall, Beaver, & Beaver, 2009). The type of data analysis
used is linked to characteristics of the data, the research problems and objectives, the
properties of statistical techniques and the researcher’s experience (Malhotra, 2010).
In this research, four statistical analysis technologies were applied to obtain the
research output. These four technologies were: principal component analysis (PCA),
logistic regression, multivariate analysis of variance (MANOVA) and multiple linear
regression analysis (MLR).
Factor analysis
An approach was used based on analysis of the 43 housing-related factors which were
included in the questionnaire. Thus, the principal component analysis (PCA) was
chosen to test the importance of various housing-related purchase factors to home
buyers and this factor analysis helped the researcher to create nine new composite
variables and one new single variable. Three analysis steps are included in PCA:
Step one: Assessment of the suitability of the data for factor analysis.
Before using factor analysis to reduce and summarise the data, the researcher needs to
consider whether the particular data set is suitable for factor analysis. There are two
main issues: sample size and the strength of the relationships between the housing
purchase factors. Tabachnick and Fidell (2012) recommend using at least 300
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sampling cases for factor analysis.
Regarding the second issue – the strength of the relationships between the variables,
Tabachnick and Fidell (2012) recommend an inspection of the correlation matrix for
evidence of coefficients greater than 0.30. Factor analysis may not be appropriate
when few correlations are above this level. Bartlett's test of sphericity (Bartlett, 1954)
and the Kaiser-Meyer-Olkin (KMO) measure (Kaiser, 1974) were also generated by
SPSS to help assess the factorability of the data in this research. A factor analysis can
be considered appropriate by a significant (P < 0.05) Bartlett's test of sphericity. In
addition, a Kaiser-Meyer-Olkin value of greater than 0.6 indicates a good factor
analysis. This research uses KMO and Bartlett’s test to examine the relationships
between the housing attributes and service attributes.
Step two: factor extraction

Factor extraction involves determining the smallest number of the factors that can be
used to best represent the relationships between the variables (Pallant, 2011). PCA
was employed in this research to determine the number of housing purchase factors
that best describe the underlying relationships among the variables. Kaiser’s criterion
(or the eigenvalue rule) is adopted to assist in determining the number of factors to
remain. The factors with eigenvalues of more the 1.0 were retained for further
investigation. The study also retains variables with factor loadings greater than 0.3 in
the rotated component matrix (Pallant, 2011).
Step three: Factor rotation and interpretation

After the number of factors has been determined, the last step is to interpret the
extracted factors. Particually, this research need to create new variables based on
factor analysis results. The factor analysis results can be used for “replacing the
original set of variables with an entirely new, smaller set of variables created either
from summated scales or factor scores” (Hair et al., 2010). This research used the
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factor analysis results to replace the original set of variables with an entirely new,
smaller set of variables created from summated scales (Hair, et al, 2010). The values
of the ten new variables were created by calculating the means of the components of
each composite factor.
After creating new composite variables, the researcher tested the reliability of the new
composite variables, removed outliers and tested for the normality of distributions.
Logistic regression
This research intention is to find out the influence of housing attributes and service
quality on home buyers’ purchase decisions, but not to examine the customers’
decisions about buying or not buying a house.
The dependent variable “purchase decision” in this thesis is a binary choice between
“Made the purchase” and “Did not make a purchase” (see Table 3.1). This question of
the survey regarding “purchase decision” focused on the action that had already
happened. The respondents’ answers about the “decisions” were 100% confirmed.
The housing purchase decision process is a complicated process. Some persons may
have the desire to purchase a house but hesitate to make the ultimate purchase
decisions (many previous studies supported this point, e.g.: Zhou, 2011; Fung, Jeng,
& Liu, 2010). It is inadequate to examine the uncertain purchase decisions in this
research.
This survey asked about the actions that respondents had already done (‘I have
already purchased a house’ or ‘I have decided not to purchase a house’). Therefore,
this question in the survey could exactly represent their final purchase decisions. And
this “yes” or “no” question offers a binary choice.
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Logistic regression is used to measure the relationship between a categorical
dependent variable and one or several continuous independent variables by converting
the dependent variable to probability scores (Field, 2009). Logistic regression is used
when the dependent variables are 1) dichotomous, 2) nominal or 3) ordinal, and the
independent variables are 1) nominal or 2) ordinal or 3) interval or rational and satisfy
or fail normality assumptions (Manning & Munro, 2007). In Hypothesis 1 and
Hypothesis 2 the independent variables represent interval scales and satisfy normality
(see Section 4.3.5), and the dependent variable in Hypothesis 1 and Hypothesis 2 –
purchase decisions, are dichotomous. Thus, logistic regression was appropriate and
was employed to test the relationships between housing attributes/services and
purchase decisions.
The independent variable in Hypothesis 1 is housing attributes; the dependent variable

in Hypothesis 1 is home buyers’ purchase decisions. The independent variable in
Hypothesis 2 is service quality provided by marketers; the dependent variable in
Hypothesis 2 is home buyers’ purchase decisions. The basic equation of the logistic
regression is:
e B1 X1  B2 X 2 ...... Bk X k  a
P
1  e B1 X1  B2 X 2 ...... Bk X k  a
where P = the probability of making housing purchase decision
e = the base of natural logarithms (approx. 2.72)
B1X1 + B2X2 +…… + BkXk + a = a linear equation
K = the number of predictors
Multivariate analysis of variance (MANOVA)

Multivariate analysis of variance (MANOVA) examines whether there are group
differences across dependent variable sets. This statistical method explores group
differences and controls for the covariate variables that could affect dependent
variable scores (Field, 2009; Tabachnick & Fidell, 2012). MANOVA has been applied
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to analyse the full data set for Hypothesis 3. The independent variables concern
demographics in Hypothesis 3. They include age, gender, marital status, family’s total
disposable income per year, education, occupation, family size and family member
influence. The dependent variable in Hypothesis 3 is home buyers’ purchase
decisions.
Two steps were followed to test H3.

Step 1: the sample was divided into two groups: 1) consumers who made purchase
decisions and 2) consumers who did not make purchase decisions. Then, using
MANOVA to test each group, the mean values were calcualted to find out which
housing attributes had significantly different mean scores. This step was done to
investigate the different attributes toward to various housing attributes between the
various demographic variables.
Step 2: the two groups “consumers who made purchase decisions” and “consumers
who did not make purchase decision” were compared. Conclusions were then made
about whether these demographic differences had a significant influence on home
buyers’ final purchase decisions.
Multiple linear regression

Multiple regression is a statistical tool that helps to predict the relationship between
several independent variables and one dependent variable. Multiple regression
involves the influence of many factors and it is used to examine the effect of some
specific factor while accounting for other factors that influence the outcome (Field,
2009). Multiple linear regression analysis is a statistical technique for examining the
relationship between two or more independent variables and one dependent variable.
The general purpose is to assess the relative contribution of the independent variables
in explaining the dependent variable at a significant level (Hair & Anderson, 2010;
Tabachnick & Fidell, 2012).
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The formula of the multiple regression model is:
Y = b0 + b1X1 + b2X2 + …+ bkXk,

Where Y is the dependent variable,
b0 is the regression constant that represents the value of the dependent variable when all the
independent variables are equal to zero.
b1, b2, … , bk are the regression coefficients that represent the contributions of each
independent variable to the prediction of the dependent variable,
X1, X2, … Xk are the independent variables.
In Hypothesis 4 and Hypothesis 5 multiple linear regression is employed to relate all

of the housing attributes/services to the single dependent variable – post-purchase
satisfaction. The independent variable in Hypothesis 4 is the intrinsic and extrinsic
housing attributes; the dependent variable in Hypothesis 4 is home buyer’s
post-purchase satisfaction level. The independent variable in Hypothesis 5 is the
service quality provided by suppliers; the dependent variable in Hypothesis 5 is home
buyer’s post-purchase satisfaction level. Table 3.2 (see next page) presents the links
between the research questions, hypotheses, independent variables, dependent
variables, and statistical methods.
3.7 Limitations of the research design

There are two major limitations in the research design:
1. The inability or shyness of the respondents to communicate in English compelled
the researcher to translate the questionnaires into the local language (Chinese). Thus,
there may have been some loss of message in the process of translation and some
content may have been inaccurate when translated into Chinese. The researcher
minimised the translation errors and ensured the questions were clearly expressed. To
address this problem, a pilot study was undertaken. The feedback from this pre-test
helped the researcher to review the wording of the questions. In addition, some
explanations were provided at the end of some survey questions to help respondents
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Table 3.2 Linking the research questions, hypotheses and statistical methods
Analysis DV and variable

Research questions Hypotheses IV and variable type
method tape
1. Which housing attributes have H1: Consumers’ residential Logistic Housing attributes (interval scales) Home buyers’
the most influence on housing housing purchase decisions in regression 1) Intrinsic housing attributes purchase
purchase decisions? China are influenced by housing (Questions 1.1-1.12) decisions
attributes. 2) Exterior design and space (dichotomous)
(Questions 2.1-2.4)
(Questions 3.1-3.7)
4) Location of facilities and services
(Questions 4.1-4.10)
2. Do services provided by H2: Consumers’ residential Logistic Service quality provided by the Home buyers’
housing suppliers significantly housing purchase decisions in regression suppliers (interval scales) purchase
affect housing purchase China are influenced by service (Questions 5.1-5.10) decisions
decisions? quality provided by suppliers. (dichotomous)
3. Which individual home buyers’ H3: Demographic variables Multivariate Age (nominal) Home buyers
characteristics influence their influence consumers’ evaluation of analysis of Gender (nominal) purchase decision
evaluation of housing attributes housing attributes and service variance Marital status (nominal) (dichotomous
and their service choices choices in house purchase (MANOVA) Educational background (ordinal) nominal)
decisions in China. Occupation (nominal)
Family total disposable income per
year (ordinal)
Number of children (ordinal)
Family size (ordinal)
(Questions 8-15)
4. Which housing attributes H4: The overall satisfaction of Multiple linear Housing attributes (interval scales) Home buyers
have the most influence on home consumers with their purchase regression 1) Intrinsic housing attributes post-purchase
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buyers' satisfaction levels with decisions is influenced by their analysis (Questions 1.1-1.12) satisfaction
their purchase decisions in China? evaluations of housing attributes 2) Exterior design and space (interval scales)
(Questions 2.1-2.4)
(Questions 3.1-3.7)
4) Location of facilities and services
(Questions 4.1-4.10)
5. Do services provided by the H5: The overall satisfaction of Multiple linear Service quality provided by the Home buyers’
suppliers significantly influence consumers with their purchase regression suppliers (interval scales) post-purchase
home buyers' levels of decisions is influenced their analysis (Questions 5.1-5.10) satisfaction
satisfaction with their purchase evaluations of the service quality (interval scales)
decisions in China? provided by suppliers.
Note: IV = independent variables, DV = dependent variables
to understand them. After reviewing the feedback from the pre-test, the researcher
polished up the wording and believes that the translation was clear and accurate.
The researcher arranged back translation of the questionnaire by a third party to make
sure no information was lost and that all questions were clearly expressed. After
reviewing the feedback from the pre-test, the researcher polished the wording, to
ensure that the translation was clear and accurate.
2. The accuracy of the responses was contingent on the willingness of participants to

answer truthfully and completely. In order to get more accurate responses, ethical
issues were considered carefully in this study. All of the returned questionnaires were
voluntarily provided by participants; the questionnaire design avoided potentially
sensitive questions and gave the informants the choice of not answering any
uncomfortable questions.
128
3.8 Conclusion
This chapter explained seven aspects of the research methodology adopted in this
research. The chapter reviewed alternative research paradigms and methodologies,
and provided a justification of the research design and methodology. The details of
data collection methods, data analysis processes, and ethical considerations were
discussed. In this study, a mail survey was used for data collection. The questionnaire
had two sections: home buyer opinions and background information. A seven-point
Likert scale was chosen to measure responses to each item in the attitude
measurement questions which were based on the literature. The SPSS 20.0 computer
program was utilised to produce descriptive and inferential statistics. Four statistical
analysis technologies were applied to obtain the research output. These four
technologies were: principal component analysis, logistic regression, multivariate
analysis of variance (MANOVA) and multiple linear regression analysis (MLR).
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CHAPTER 4 ANALYSIS OF DATA
4.1 Introduction
In the previous chapter, the research methodology was reviewed to establish data
collection and analysis procedures, including the theoretical framework, the survey
design, sampling choice and data analysis methods. This chapter provides a
systematic analysis of the survey data, including descriptive statistics on the
demographic data of respondents and inferential statistics for testing research
hypotheses. This chapter has seven sections, as shown in Figure 4.1(see next page).
The first section outlines the contents of this chapter. Basic analyses including
cleansing, screening, demographic characteristics of responders are presented in
Section 4.2. Section 4.3 employs factor analysis to extract new composite variables,
and then reliability tests of composite variables and normality tests of data distribution
have been conducted, followed by a descriptive analysis of these composite variables
in Section 4.4. Section 4.5 uses logistic regression, multivariate analysis of variance
(MANOVA) and multiple linear regression (MLR) to test the five hypotheses. Section
6 summarises the results as they relate to the research questions as discussed. The
conclusion to this chapter can be found in Section 4.7.
4.2 Preliminary data analysis

Of the 2000 questionnaires sent by mail, 478 were returned, yielding a response rate
of 23.9 per cent. Before analysing the data in-depth, it should be examined, and
descriptive statistics reports should be generated so that the researcher is familiar with
the data and understands the relationships between variables (Hair & Anderson, 2010;
Malhotra, 2010). The preliminary data screening and analysis in this research was
done in two steps: data cleansing and screening, followed by the provision of a
description of the demographic characteristics of the sample.
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Figure 4.1 Outline of Chapter 4, with section numbers and their
interrelationships.
4.1 Introduction
4.2.1 Cleaning and screening of
Data
4.3.1 Exploratory factor 4.2 Preliminary Data Analysis
analysis 4.2.2 Demographic characteristics of
responders
4.3.2 Composite variables
4.3 Factor analysis and create
4.3.3 Examine the reliability
of the composite variable composite variables
4.3.4 Outliers
4.3.5 Normality of 4.4.1 Descriptive statistics of

distributions composite variables4.
4.4 Descriptive analysis of data
4.4.2 Descriptive statistics of post-
purchase satisfaction
4.5.1 Logistic regression
for testing Hypothesis 1
and Hypothesis 2
4.5 Data analysis – research
4.5.2 Testing hypothesis 3
regarding demographics hypotheses testing
4.5.3 Testing hypotheses

4 and hypotheses 5
4.6 Summary of analysis
4.7 Conclusion
4.2.1 Cleansing and screening of data
In order to increase accuracy and to ensure that the assumptions for the later analysis
had not been violated, the initial step of the preliminary data analysis was to cleanse
and screen the data. In the process of entering the raw data into SPSS, the researcher
checked whether any respondents had answered questions incorrectly and whether the
distributions of scores on variables were appropriate for analysis by different
statistical techniques. After entering the raw data into SPSS, the researcher checked
that there were no values out of the acceptable range, and judged whether the means
131
and standard deviations were plausible (Burton & Steane, 2004). The accuracy of data
input was also examined. In some cases, data was found to be missing. Multivariate
analysis require complete data on all the variables; otherwise, the cases with missing
data cannot be analysed (Burton, S & Steane, P 2004). If the missing data is greater
than 10 per cent of the total data, the result may be distorted (Hair & Anderson 2010).
Thus, all of the missing data was dealt with by researcher. Alternative ways to deal
with missing data are pairwise deletion and listwise deletion (Tabachnick & Fidell,
2012). Pairwise deletion excludes cases with missing data only if they have missing
data on the variables involved in a particular computation. Listwise deletion excludes
cases with missing data from all computations (Enders, 2010). In total, only 14
questionnaires (2.93 per cent of respondents) contained missing data and these cases
were removed directly by listwise deletion, because the number of these cases was
very small, so that once these cases were excluded the data could be assumed to
provide unbiased estimates of all parameters of interest, and standard errors (Zikmund
et al., 2010). This resulted in a final sample of 464 respondents to be used for data
analysis.
4.2.2 Demographic characteristics of respondents
This section presents the demographic characteristics of the respondents. The

researcher utilised frequencies and percentages to identify data characteristics. The
profiles of the respondents’ personal histories covered eight categories: (1) gender
(2) age (3) marital status (4) highest educational qualification (5) occupation (6)
family’s total disposable income per year (7) number of children, and (8) family size.
Each of the respondents’ demographic characteristics is detailed in Tables 4.1 to 4.8.
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Table 4.1 Demographic statistics
Frequency Percentage
Gender
Male 238 51.29
Female 226 48.71
Total 464 100.00
Age
Under 25 years 26 5.60
25 to 34 years 204 43.97
35 to 44 years 104 22.41
45 to 54 years 86 18.53
55 to 64 years 40 8.62
65 or over 65 years 4 0.86
Total 464 100.00
Married status
Single 114 24.57
Married 348 75.00
Others 2 0.43
Total 464 100.00
Education
Primary school 5 1.08
Secondary school 32 6.90
Diploma/Polytechnic 106 22.84
Bachelor degree 251 54.10
Master degree 36 7.76
Doctorate degree 34 7.33
Others 0 0
Total 464 100.00
Occupation
Government employee 61 13.15
Employee of state-owned enterprise 147 31.68
Private business employee 69 14.87
Public service unit 119 25.65
Business owner 11 2.37
Others 57 12.28
Total 464 100.00
Family income per year
50,000 or under 50,000 101 21.77
50,000-99,999 168 36.21
100,000-149,999 112 24.14
150,000- 199,999 50 10.78
200,000-249,999 10 2.16
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250,000 or over 250,000 23 4.96
Total 464 100.00
Number of children
Parents with 1 child 291 62.72
Parents with 2 children 23 4.96
Respondents with no children 150 32.33
More than 2 children 0 0.00
Total 464 100.00
Family size
1 family member 40 8.62
2 family members 76 16.38
More than 5 family members 8 1.72
Total 464 100.00
Source: Analysis of survey data
Gender. Table 4.1 shows the sample is almost evenly split between males and females
– 51.29 per cent of respondents were male and 48.71 per cent were female. This is
normal in business surveys conducted in Wuhan. According to a report on China’s
population and employment statistics in 2011, the employment rates of males and
females in Wuhan are very similar, with 96.42 per cent for males and 95.33 per cent
for females. Males comprised 53.78 per cent and females 46.22 per cent of the
workforce from all industries (the structure of industries in Wuhan are summarised in
Table 2.8).
Age. The official working age is 16 years old and the retirement age is 55 for females
and 60 for males. Table 4.1 describes the range of ages of the 464 respondents. The 25
to 34 age group constituted the largest group (43.97 per cent) of the sample, and the
second-largest age group was between 35 and 44 years. Less than 9 per cent of
respondents were between 55 and 64 years; only a very few respondents were under
25 years or over 65 years; the proportion of these respondents was less than 7 per cent
of the total. This result shows that consumers in the 25–44 age groups are more
134
concerned about the residential house market and may have more interest in
purchasing a house. This is consistent with data from the China Real Estate Statistics
Yearbook (2010).
Marital status. The distribution of respondents by marital status is shown in Table

4.1. Married respondents comprised 75.0 per cent of the total and 24.57 per cent of
respondents were single. Only 0.48 per cent of respondents were in the ‘Other’
category which included separated people, widows and widowers.
Highest education qualification. Table 4.1 shows the educational backgrounds of the
respondents. Bachelor’s degree holders formed the bulk (54.10 per cent) of the sample,
while another 22.844 per cent of respondents held diploma or polytechnic awards.
Nearly 15 per cent of respondents had a postgraduate degree and less than 8 per cent
had only graduated from primary or secondary school.
Occupation. The areas in which respondents worked included: government,

state-owned enterprises, private businesses, the public service, owners of businesses,
and “other”. Table 4.1 shows the occupations of respondents. The highest percentage
of respondents was in state-owned enterprise employment (31.68 per cent), followed
by public service units (25.65 per cent). Private business employees and government
employees accounted for approximately 14.87 per cent and 13.15 respectively. Only a
very few respondents were business owners; they comprised 2.37 per cent of the total.
The category “other” includes retired and unemployed people. It made up 12.28 per
cent of the total. In Wuhan, employees in government, state-owned enterprises and
public service units receive housing financial support from the government; therefore,
it is no surprise that these three occupations accounted for the major proportion (70.75
per cent) of the sample as the highest house purchase motivation existed in these
groups of employees.
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Family’s total disposable income. According to the National Bureau of Statistics of
China (2011), the average per capita income of Wuhan was 56,763 RMB per year in
2010. The respondents’ family total disposable incomes are shown in Table 4.1. The
table shows that the majority (57.97 per cent) of the respondents’ family total
disposable incomes were at the low and middle-to-low levels, which means that they
were lower that 100,000 (RMB) per year, while 34.91 per cent of respondents ranked
in the middle and middle-to-high levels which are between 100,000 and 200,000
RMB. The respondents whose incomes were in the high and extremely high levels
accounted for 7.11 per cent of the total.
Numbers of children. In 1982, the Chinese government established its one child
policy; family planning has remained a basic state policy for China in the past three
decades. In 2006, the Chinese government revised The Population and Family
Planning Law, and allowed couples in which both members were products of one
child families, and who lived in urban areas, to have a second child. In addition, the
policies in ethnic minority areas are more flexible. As shown in Table 4.1, parents
with one child constituted the majority (62.80 per cent) of the sample, and 4.96 per
cent of respondents had two children, while all the other respondents (32.33 per cent)
were without children.
Family size. Table 4.1shows family sizes of between two persons and four persons
make up the majority (82.55 per cent) of the sample. Families with only one person
and more than five persons made up 8.62 per cent and 8.84 per cent respectively.
Table 4.2 Purchase decision

Frequency Percentage
Purchased residential houses 326 70.26
Not purchased residential house 138 29.74
Total 464 100.00
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Purchase decision. Table 4.2 shows consumers’ purchase decisions on residential
houses: 70.259 per cent of the respondents had purchased residential houses, and
29.741 per cent respondents had not purchased residential houses.
4.3 Factor analysis and creation of composite variables

The first two research questions investigated which housing attributes and service
quality aspects have a significant influence on home buyers’ purchase decisions. The
aim was to test whether various housing-related factors had a significant influence on
home buyers’ purchase decisions in Wuhan. In Chapter 2, the research identified four
housing attributes: intrinsic housing attributes (treated collectively as one attribute)
and three extrinsic housing attributes – housing exterior design and space,
environmental attributes and location attributes. Another factor is the set of services
provided by the supplier. Together these factors cover 43 attributes (presented in Table
2.10). In this section, a compositional approach is used based on an analysis of the 43
housing-related factors. Because data reduction was a primary concern, principal
components analysis (PCA) (Greene & Ortuzar, 2002; Opoku & Abdul-Muhmin,
2010) was chosen to extract relative components of housing attributes in the Wuhan
housing industry.
4.3.1 Factor analysis
As discussed in Section 3.6.5, three steps of factor analysis were conducted.

Step one: Assessment of the suitability of the data for factor analysis
The appropriate sample size was identified. Tabachnick and Fidell (2012) recommend
using a sample of at least 300 for factor analysis. With 464 cases this research
qualifies for factor analysis.
Tabachnick and Fidell (2012) also advised that researchers should have several
sizable correlations before considering factor analysis and if no correlation exceed
0.30, the use of factor analysis is questionable. To test the strength of the relationship
137
between the housing purchase factors, KMO and Bartlett’s test were employed. The
results are shown in Table 4.3. The output of the dataset exhibited many bivariate
correlations between variables which were in excess of 0.30 and so the correlation
matrix was considered to be potentially appropriate for factor analysis. The
Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO = 0.84) was greater
than .6, and Bartlett's test of sphericity was significant, x 2 (DF = 66, n = 464) =
4195.16, p < 0.05, so by each of these two criteria it was also deemed to be
appropriate to apply factor analysis to this dataset.
Table 4.3 The output of KMO and Bartlett’s test

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.84

Approx. Chi-Square 4195.16
Bartlett's test of sphericity df 903
Sig. 0.0001
Step two: factor extraction
In this research, many of the communalities were quite large and none were below 0.3
(see Appendix 4) and so a good solution is likely (Mark & Don, 2007). The research
retained the factors for which eigenvalues were more than 1 and also remained the
variables with factor loadings greater than 0.3 in the rotated component matrix (Hair
et al, 2010). Table 4.4 shows that 11 components had eigenvalues greater than 1.0.
Thus, the PCA extracted 11 components out of 43 housing-related factors. This
research intends to examine all of the 11 components, thus, scree plot for further
components reduction are not been used.
Table 4.4 Eigenvalues and total variance explained

Components 1 2 3 4 5 6 7 8 9 10 11
Eigenvalues 10.52 3.22 2.73 2.23 1.87 1.46 1.41 1.34 1.18 1.13 1.05
% of variance 14.27 7.66 6.59 6.23 5.57 5.02 5.01 4.53 4.25 3.24 3.04
Cumulative % 14.27 21.93 28.52 34.75 40.32 45.33 50.34 54.87 59.12 62.35 65.40
Extraction Method: principal component analysis.

138
Examining the rotation sums of squared loadings, component 1 explains 14.265% of
the variance, component 2, 7.66%; component 3, 6.59%; component 4, 6.23%;
component 5, 5.57%; component 6, 5.02%; component 7, 5.01%; component 8,
4.53%; component 9, 4.25%; component 10, 3.24%, and component 11, 3.04% of the
variance in the original set of purchase items. These 11 components together
explained 65.40% of the variance in the original set of housing-related factors.
The researcher considered that factor scores of 0.30 were significant, as the sample
size was larger than 350 in this study (Hair et al., 2010, p. 117). Table 4.5 (see next
page) identifies significant housing purchase factors with factor loading exceed 0.30.
Step three: Factor rotation and interpretation

In all, 11 components were extracted from 43 variables. However, component six
included five variables: greenery of adjacent street, location close to food court,
presence of garden and size of garden, location close to shopping centre, location
close to social activities centres. These five variables are complex items with loadings
on more than one component, and all five variables have a loading on the first five
components. As a result, component 6 was deleted and 10 components remained.
These ten new components covered the 33 housing and 10 service attributes within
the five factors (in the questionnaire). Based on the pattern of factor loading, labels
were assigned to the factors as shown in Table 4.5 (see next page).
4.3.2 New composite variables
As discussed in Section 3.6.5, the next step in the data analysis was the creation of
composite variables based on the results of the factor analysis – 10 new variables need
to be generated. This research used the factor analysis results to replace the original
set of variables with an entirely new, smaller set of variables created from summated
scales (Hair, et al, 2010).
139
Table 4.5 The signifacant housing purchase factors
Component
1 2 3 4 5 6 7 8 9 10 11
Readiness 0.81
Dependability 0.80
Secure 0.78
Have best interest at heart 0.77
Understand home-buyers' needs 0.72
Consistently courteous 0.71
Convenience of service office hours 0.70
Providing service as promised 0.69
After sales service 0.65
Neat, professional appearance 0.56
Presence of footpath 0.73
Street Lighting 0.70
Width of road 0.68
Water drainage System 0.62
Greenery of adjacent street 0.57 .311
Community services e.g. refuse collection, public phone 0.42 0.33

Location on downtown 0.80
Location on a main street 0.73
Location close to public transport 0.68

Location close to workplace 0.63 0.40
Kitchen & dining room size 0.82
Number & size of bathrooms 0.77

Living room size 0.67
Number & size of bedrooms 0.55 0.33
Appearance of the house 0.83
Appearance of external walls 0.81
Public area 0.60 0.31
Location close to food court 0.30 0.66 0.36

Location close to social activities centres 0.31 0.63
Presence of garden and size of garden 0.39 0.53
Location close to schools and nurseries 0.78

Location close to health centre and hospital 0.75
Location close to shopping centre 0.31 0.48 0.53
Architectural materials 0.74

Layout & decorate style 0.55
Air quality of the living area 0.46 0.34
Type of house 0.78

Lot size 0.31 0.74
Age in years 0.38
Availability of storage room 0.73

Surrounding noise 0.47 0.52
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Housing Price 0.69
Payment in terms 0.62
Extraction Method: Principal Component Analysis.

The respondents rated the degree of their agreement with the statements regarding
their residential house purchase factors which were measured on a seven-point Likert
scale (7 = Strongly agree / extremely important, 4 = Neutral, 1 =Strongly disagree /
not at all important). After factor analysis, the researcher interpreted the remaining
nine composites into: 1) service provided by marketers, 2) surrounding environment,
3) location facilities and services (location attributes), 4) private living space, 5)
housing exterior design and space, 6) neighbourhood amenities, 7) aesthetics, 8)
essential housing attributes, 9) financial consideration. In addition, there was one
single variable, presence and availability of storage room. The value of the nine new
composite variables and the new single variable were created by calculating the
means of the components of each composite factor.
For example, ‘service quality provided by suppliers’ can be defined as the first
composite variable: X1. This composite variable was calculated from the mean of
scores of each respondent for the 10 questions related to this composite factor. Thus,
ten new variables in this research were: X1: service quality provided by suppliers, X2:
surrounding environment, X3: location facilities and services, X4: private living space,
X5: housing exterior design and space, X6: neighbourhood amenities, X7: aesthetics,
X8: essential housing attributes, X9: presence and availability of storage room and X10:
financial considerations. Consistent with the literature review chapter, housing
intrinsic attributes consisted of X4, X7, X8, X9 and X10; X5 belonged to housing
exterior design and space; X2 related to housing environment attributes; X3 and X6
contributed to housing location attributes; and service quality provided by suppliers
could be explained by X1. These ten new variables were used to examine home
141
buyers’ perceptions to determine the relative importance of each purchase factor. The
reliability of each new variable will be discussed in Section 4.3.3.
Table 4.6 Ten new variables for the subsequent hypotheses testing
Correspond to five factors
House purchase factors in questionnaire
I). Services provided by marketers
2. Dependability in handling home buyers’ service problems
4. Secure housing transaction is important to home buyers.
5. Employees who are consistently courteous Service quality provide by
6. Employees having the home buyers’ best interests at heart the suppliers in question 5
7. Employees who understand the needs of their home buyers
8. Convenience of service office hours influence home buyers to
purchase
10.Availability of after sales service
II). Surrounding environment
1. Less surrounding noise
2. Width of road and passageways
Environment attributes in
3. Greenery of adjacent street
question 3
4. Rain water drainage system
5. Street lighting
6. Presence of footpath
III). Location facilities and services (Location attributes)
1. Location close to shopping centre
2. Location close to food court
3. Location close to social activities centres
Location attributes in
4. Location on a main street
question 4
5. Location on a downtown street
6. Location close to public transport
7. Location close to workplace
8. Location close to other community services
IV). Private living space
1. Size of kitchen and dining room
Housing intrinsic attributes
2. Number and size of bedrooms
in question 1
3. Number and size of bathrooms
4. Size of living room
V). Exterior design and space
1. The appearance of the house/building Housing exterior design
2. Presence of garden and size of garden and space in question 2
3. External walls
142
Correspond to five factors
House purchase factors in questionnaire
4. Exterior spaces
VI). Neighbourhood amenities
Location attributes in
1. Location close to schools and nurseries
question 4
2. Location close to health centre and hospital
VII). Aesthetics Housing intrinsic attributes
1. Modern layout & decorative style in question 1 and
2. Architectural materials Environment attributes in
3. Better air quality of the living area question 3
VIII) Essential housing attributes
1. Dwelling type Housing intrinsic attributes
2. Age in year in question 1
3. Lot size of the house
IX). Presence and availability of storage room Housing intrinsic attributes
1. Presence and availability of storage room in question 1
X). Financial consideration
Housing intrinsic attributes
1. Housing price
in question 1
2. Payment in terms
4.3.3 Examine the reliability of the composite variable
The reliability of a measure refers to its stability over a variety of conditions, such as
contestable instrument items, researcher bias, respondent bias and unreliable subjects
(Zikmund et al., 2010). In this research, the Cronbach’s Alpha coefficient is used for
estimating the internal consistency and reliability for a set of two or more construct
indicators (Hair & Anderson, 2010). The value of the alpha coefficient typically
ranges from 0 to 1.0 (Tabachnick & Fidell, 2012). Cronbach’s Alpha test of reliability
was calculated for each of the composite variables based on 464 respondents. Table
4.7 (see next page) presents the Cronbach’s Alpha reliability coefficients.
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Table 4.7 Cronbach’s Alpha reliability analysis
Composite variables Symbols N of items Alpha value
I). Service quality provide by suppliers X1 10 0.91
II). Surrounding environment X2 6 0.83
III). Location facilities and services X3 8 0.81
IV). Private living space X4 4 0.77
V). Exterior design and space X5 4 0.74
VI). Neighbourhood amenities X6 2 0.76
VII). Aesthetics X7 3 0.64
VIII) Essential housing attributes X8 3 0.59

IX). Presence and availability of
1 NA
storage room X9
X). Financial consideration X10 2 0.70

A low alpha coefficient value implies the sample of observed variables performs
poorly in capturing the construct. A high alpha coefficient indicates that the sample of
observed variables tested correlates well with the true scores (Malhotra, 2010). In
some studies, modest reliability in the range of 0.50 to 0.60 will suffice (Zikmund et
al., 2010). As shown in Table 4.7, the Cronbach’s Alpha for the essential housing
attributes was 0.59, and for aesthetics it was 0.64, and the Cronbach’s Alpha for all
the other composite variables exceeded 0.70. The ninth variable is a single variable,
so no alpha coefficient was calculated for this variable. Therefore, all of these nine
variables were reliable for this research.
4.3.4 Outliers
The next step in preliminary data analysis explored the outliers in the sample. An
outlier is a response that appears to deviate markedly from other observations in the
research sample (Hawkins 1980; Hair & Anderson 2010). Identification of outliers is
important because inclusion of outliers in the sample will distort the overall research
results (Tabachnick & Fidell, 2012). In general, outliers can be identified by
univariate and multivariate techniques. Univariate outliers mean the outliers are an
extreme response for a single variable. Multivariate outliers refer to the outliers that
144
have an uncommon pattern of responses across the several variables. Outliers could
exist for dichotomous variables, and for variables on ratio and interval scales. Outliers
should be removed from the data set for two reasons: Firstly, the outliers are different
and a statistician would describe them as belonging to a different population.
Secondly, a single outlier has a bigger influence on the statistical calculations than the
remainder of the group, because statistical tests square the differences between values
when the calculations are being made. Tabachnick and Fidell (2012) recommend
removing a variable from an analysis when the variable explains less than 10 per cent
of the sample for either of these two reasons. The dichotomous variable, Gender, in
the second part of the questionnaire did not have any variables less than 10 per cent of
the sample.
To identify the univariate outliers in this study, the data value of each composite
variable was converted to a standard Z score to allow comparisons across variables.
Cases with standardised scores with an absolute value in excess of 3.29 (p < 0.001,
two tailed test) (Zikmund et al., 2010) were identified as potential outliers.
All of the 464 cases were run in the SPSS program version 20 to examine the Z scores
in terms of every variable. Potential outliers existed in 32 cases, and these outliers
were attributable to inconsistent input by respondents. Therefore, the researcher
removed these 32 cases (32/464 = 6.90 per cent) from the sample, and 432 cases were
used to examine the research hypotheses.
In some cases, the observations fell into the allowable range for individual variables,
but outliers occurred when several variables combined. Thus, multivariate detection
of outliers was also conducted in this research. Mahalanobis distance for each case
was calculated to provide the distance in multidimensional space of the observation
from the mean of all the variables. A variable is considered to be a potential outlier
when the value of its Mahalanobis distance is greater than a critical value (Hair &
145
Anderson, 2010). The Mahalanobis distance for each variable in the questionnaire
was evaluated as χ2 (chi-square) with degrees of freedom equal to the number of
variables and a probability estimate of p < 0.001 (Tabachnick & Fidell 2012). A test
for multivariate outliers was then conducted using the techniques described by
Tabachnick and Fidell (2012, p. 67). Using data from the set of 10 variables, the
Mahalanobis distance was calculated for each case. A critical value of χ102 = 29.588
was employed. No case was identified with a Mahalanobis score in excess of this
value and so no Mahalanobis outliers were identified.
4.3.5 Normality of distributions
The next step in the data analysis was to test the normality of the ten variables. Since
almost all statistical tests depend on the assumption that the data follows a normal
distribution, it is necessary to test the normality of the data distribution (Malhotra
2010). Common problems are skewed distributions which can be either positively
skewed or negatively skewed. Problems may also appear when the distribution is too
flat (platykurtic) or too peaked (leptokurtic) (Manning & Munro, 2007).
The measurement method to determine whether distribution varies significantly from

normality is: simply divide the skew value by the standard error of the skew to create
a Z score. For sample sizes less than 300, the skew is significant when the calculated
value exceeds an absolute value of 2.58. When the sample size is bigger than 300, any
value exceeding an absolute value of 3.29 has been deemed to show significant
skewness (Tabachnick & Fidell, 2012). Distributions of the 10 variables were
examined for skewness through SPSS in this research. Table 4.8 (see next page)
illustrates the skewness and kurtosis values for each of the 10 variables in the research.
All the variables are normally distributed.
146
Table 4.8 The values of skewness and kurtosis of the variables.
Variables Skewness (Z-score) Kurtosis(Z-score)

Service quality provide by suppliers -2.75 -0.58
Surrounding environment -2.98 0.25
Location facilities and services -0.48 -0.93
Private living space -1.84 -1.035
Exterior design and space -1.173 -1.67
Neighbourhood amenities -3.24 -1.71
Aesthetics -3.11 -1.50
Essential housing attributes -2.95 -0.60
Presence and availability of storage room -1.29 -2.50
Financial considerations -2.77 -1.43
4.4 Descriptive analysis of data

Descriptive analysis is the elementary transformation of data in a way that describes
basic characteristics such as central tendency, distribution, and variability (Zikmund et
al., 2010). The descriptive statistics in terms such as minimum, maximum, mean,
standard deviation, the variance for each computational variable in the purchase
decision stage, and the overall post-purchase satisfaction levels, of the 432
respondents are detailed below.
4.4.1 Descriptive statistics of ten variables
This section describes the minimum, maximum, mean, standard deviation scores of
the 43 housing attributes, which were listed in the first section of the questionnaire. As
shown in Table 4.9 (see next page), six items out of ten service attributes received
high mean scores (exceeding 6). The home buyers perceived the most important issue
among these six items to be after sales service with a mean score of 6.44. The
second-highest mean score of 6.31 was for secure housing transaction. Employees
who have a neat, professional appearance received the lowest mean score (4.83 out of
147
Table 4.9 Perceptions towards service quality
Service quality attributes Mean Minimum Maximum Std.

After sales service 6.44 4.00 7.00 0.72
Secure housing transaction 6.31 3.00 7.00 0.87
Dependability 6.14 3.00 7.00 0.90
Providing service as promised 6.14 2.00 7.00 0.97
Readiness to respond 6.01 3.00 7.00 0.90
Convenience of service office hours 6.07 1.00 7.00 0.94
Understand the needs of home buyers 5.86 2.00 7.00 0.99
Best interests at heart 5.71 2.00 7.00 0.97
Consistently courteous 5.60 2.00 7.00 1.06
Neat, professional appearance 4.83 1.00 7.00 1.34
Composite variable 1 (X1) 5.92 3.90 7.00 0.70
Table 4.10 Perceptions towards surrounding environmental attributes
Surrounding environmental attributes Mean Minimum Maximum Std.

Avoid surrounding noise 6.25 2.00 7.00 0.81
Rain water drainage system 6.21 3.00 7.00 0.83
Greenery of adjacent street 5.64 2.00 7.00 0.99
Street lighting 5.62 2.00 7.00 1.17
Width of road 5.43 3.00 7.00 1.10
Presence of footpath 5.32 1.00 7.00 1.36
7). The overall mean score of composite variable 1 was 5.92.
Table 4.10 shows that all six items related to environmental attributes received high
mean scores (scores exceeding five). Home buyers’ perceptions of the attributes avoid
surrounding noise of their living area and rain water drainage system had the
highest mean scores (6.25 and 6.21 respectively). The overall mean score of
composite variable 2 was 5.75.
148
Table 4.11 Perceptions towards location of facilities and services
Location facilities and services Mean Minimum Maximum Std.

Location close to workplace 5.81 2.00 7.00 0.96
Location close to public transport 5.71 1.00 7.00 1.24
Location close to shopping centre 5.26 1.00 7.00 1.34
Location on a downtown street 4.72 1.00 7.00 1.54
Location close to food court 4.57 1.00 7.00 1.45
Location on a main street 4.23 1.00 7.00 1.56
Location close to social actives centre 4.18 1.00 7.00 1.47
Location close to other community services 4.13 1.00 7.00 1.90
As indicated in Table 4.11, among the eight items in the location of facilities and
services attributes, the mean score for location close to workplace was the highest
(with a means score of 5.809). The second-highest mean score (5.709) was for
location close to public transport. Location on a main street, location close to social
activity centre and location close to other community services had the lowest three
mean scores, 4.226, 4.180 and 4.126 respectively. The overall mean score of
composite variable 3 was 4.824.
Table 4.12 indicates four housing attributes are involved in the private living space.
Bedroom obtained the highest mean score (5.19) and bathroom obtained the lowest
mean score of 4.95, this value did not appear to be much different from the highest
one. The overall mean score of composite variable 4 was 5.07.
Table 4.12 Perceptions towards private living space

Private living space Mean Minimum Maximum Std.
Number and size of bedrooms 5.19 1.00 7.00 1.29
Size of living room 5.18 2.00 7.00 1.19
Size of kitchen and dining room 4.99 1.00 7.00 1.20
Number and size of bathrooms 4.95 1.00 7.00 1.32
149
Table 4.13 Perceptions towards exterior design and space
Exterior design and space Mean Minimum Maximum Std.
Public area 5.32 2.00 7.00 1.24
Appearance of the house/building 5.04 1.00 7.00 1.30
External walls 4.48 1.00 7.00 1.37
Presence of garden and size of garden 4.09 1.00 7.00 1.57
Table 4.13 includes four exterior design and space attributes. Public area gained the
highest mean score (5.32), presence of garden and size of garden got the lowest
mean score (4.09). The overall mean score of composite variable 5 was 4.737.
As indicated in Table 4.14, two attributes contributed to the neighbourhood amenities

variable. Location close to schools and nurseries had a mean score of 5.76 and
location close to health centre and hospital had a mean score of 5.67. The mean
score of composite variable 6 was variable 5.71.
Table 4.14 Perceptions towards neighbourhood amenities

Neighbourhood amenities Mean Minimum Maximum Std.
Location close to schools and nurseries 5.76 2.00 7.00 1.19
Location close to health centre and hospital 5.69 2.00 7.00 1.12

A summary of the mean scores of attributes in the aesthetics variable is shown in
Table 4.15 (see next page). The overall mean score for aesthetics was 6.25.
Architectural materials had a slightly higher mean score (6.39) than layout and
decorative style (6.21) and air quality 6.15.
150
Table 4.15 Perceptions towards aesthetics
Rank Aesthetics Mean Minimum Maximum Std.
1 Architectural materials 6.39 3.00 7.00 0.80
2 Layout & decorative style 6.21 3.00 7.00 0.87
3 Air quality of the living area 6.15 3.00 7.00 0.78
4 Composite variable 7 (X7) 6.25 5.00 7.00 0.57

Table 4.16 shows that among the three attributes in the essential housing attributes,
the attributes age in years had the highest mean score (5.84), followed by lot size
(5.65). House type had the lowest mean score (4.69). The overall mean score of
essential housing attributes was 5.39.
Table 4.16 Perceptions towards essential housing attributes
Essential housing attributes Mean Minimum Maximum Std.
Age in years 5.84 2.00 7.00 1.07
Lot size 5.65 3.00 7.00 1.03
House type 4.69 1.00 7.00 1.66

Table 4.17 shows that the mean score for presence and availability of storage room is
4.48.
Table 4.17 Perceptions towards presence and availability of storage room

Presence and availability of storage room Mean Minimum Maximum Std.
Presence and availability of storage room (X9) 4.48 1.00 7.00 1.62

Table 4.18 shows that the mean score for home buyers’ attitudes towards housing
price was 6.88, which is the highest mean score among all of the 43 attributes. The
overall mean score of composite variable 9 (financial considerations) was 6.43.
Table 4.18 Descriptive statistics of financial consideration

Financial considerations Mean Minimum Maximum Std.
Housing price 6.88 5.00 7.00 0.34
Payment in terms 5.98 4.00 7.00 0.81
151
The range of standard deviations of the composite variables is from 0.45 to 1.62,
which is not very large, indicating that respondents did not have widely differing
perspectives towards housing attributes. This result is consistent with Triola and
Franklin who found that “whether in manufacturing or in a service area, quality
requires consistency of goods or services, and consistency corresponds to a small
amount of variation indicated by a small standard deviation” (Triola & Franklin,
1995).
4.4.2 Descriptive statistics for post-purchase satisfaction
Home buyers’ overall post-purchase satisfaction is the dependent variable in H5. The
dependent variable needs to satisfy normality assumptions before Multiple Linear
regression can be considered. Descriptive statistical analysis was conducted to
examine the values of skewness and kurtosis, which can help researchers to identify
whether this variable satisfied normality assumption. This section also describes the
minimum, maximum, mean, and standard deviation scores for consumers’
post-purchase satisfaction.
Of the 464 respondents 326 had purchased residential houses. Home buyers’
post-purchase satisfaction levels are shown in Table 4.19. The overall mean score for
post-purchase satisfaction is 4.25, and the standard deviation is not large (1.022),
indicating that respondents had similar levels of overall satisfaction. Table 4.19
presents the values of skewness and kurtosis for post-purchase satisfaction. The result
indicates a normal distribution for overall satisfaction.
Table 4.19 Descriptive statistics for post-purchase satisfaction

Post-purchase satisfaction Mean Minimum Maximum Std. Skewness Kurtosis
4.25 2.00 7.00 1.02 0.87 -1.48
152
4.5 Data analysis – hypothesis testing
The aim of this section is to test the five research hypotheses. Following the factor
analysis, the research model was modified to reflect the 10 new variables, shown in
Figure 4.2. As discussed in Section 3.6.5, each of the hypotheses was examined for
statistical significance using bivariate and multivariate analysis to test the
relationships between the independent variables (X2–X10 in Hypothesis 1; X1 in
Hypothesis 2; Demographic variables in Hypothesis 3; X2–X10 in Hypothesis 4; X1 in
Hypothesis 5) and dependent variables (purchase decision in Hypotheses 1, 2 and 3,
post-purchase satisfaction in Hypothesis 4 and Hypothesis 5). Logistic regression,
multivariate analysis of covariance and multiple linear regression were conducted to
test the five research hypotheses.
Figure 4.2 The research model with composites

Surrounding environment
Location facilities and

service
Private living space
Exterior design and space
Neighborhood amenities Housing Attributes
Aesthetics
H4
H1
Housing essential
attributes
Demographic:
Age
Gender
Storage room Income
Education
Marital status decision Level
Financial consideration Occupation
Children
Family size
H2 H5
Housing service
quality
153
4.5.1 Logistic regression for testing Hypothesis 1 and
Hypothesis 2
As discussed in Section 3.6.5, all ten independent variables in Hypothesis 1 and

Hypothesis 2 were measured using interval scales and satisfy normality, and the
dependent variable – purchase decision in H1 and H2 are dichotomous. In this
situation, logistic regression is appropriate to test for differences between the
consumers in the two situations (had purchased a house or had not purchased a house).
Hence, logistic regression has been applied to test the relationships between housing
attributes/services and purchase decisions.
Testing of Hypothesis 1 and Hypothesis 2

Hypothesis 1: Consumers’ residential housing purchase decisions are influenced by
housing attributes.
Hypothesis 2: Consumers’ residential housing purchase decisions are influenced
service quality provided by suppliers.
According to the results of factor analysis in Section 4.3.2, ten new variables were
generated for residential house attributes and quality of services provided by suppliers.
Therefore, ten sub-hypotheses were developed to test in this section.
Consumers’ purchase decisions are influenced by the following housing attributes:
H1a: Surrounding environment.
H1b: Location of facilities and services.
H1c: Private living space attributes.
H1d: Exterior design and space.
H1e: Neighbourhood amenities.
H1f: Aesthetic attributes
H1g: Essential housing attributes.
H1h: Presence and availability of storage room.
154
H1i: Financial considerations.
H2: Service quality provided by suppliers.
The variables in the model of logistic regression in these hypotheses are described in
Table 4.20. The dependent variable in this logistic analysis is purchase decision which
is described as “purchased residential house”. Responses are either 0 or 1. An answer
of “0” means they had not purchased a house, and “1” means they had purchased a
house. Table 4.21 (see next page) shows the reduced mean scores for house purchase
factors. Most of the standard deviations of the 10 interval variables in Table 4.21 are
less than 1.50 indicating the perspectives of respondents were not quite different, as
discussed in Section 4.4.1. The results of logistic regression are shown in Table 4.22
(see next page).
Table 4.20 Variable description in Hypothesis 1 and Hypothesis 2

Variable Variable description
Response to the question: "Have you purchased
Have purchased residential house(s) residential house(s)?" No = 0, Yes = 1
Service quality (X1) Responses to questions 5.1-5.10

Surrounding environmental attributes (X2) Responses to questions 3.2-.3.7
Location facilities and services (X3) Responses to questions 4.3- 4.10
Private living space (X4) Responses to questions 1.4-1.7
Exterior design and space (X5) Responses to questions 2.1-2.4
Neighbourhood amenities (X6) Responses to questions 4.1and4.2
Aesthetics (X7) Responses to questions 1.9,1.10 and 3.1
Essential housing attributes (X8) Responses to questions 1.1-.1.3
Presence and availability of storage room (X9) Responses to questions 1.8
Financial considerations (X10) Responses to questions 1.11and.1.12
155
Table 4.21 Reduced mean score of ten house purchase factors
Purchase factors Mean Std.
Financial considerations (X10) 6.43 0.45
Aesthetics (X7) 6.29 0.57
Service quality (X1) 5.92 0.70
Surrounding environmental attributes (X2) 5.75 0.762
Neighbourhood amenities (X6) 5.71 1.04
Essential housing attributes (X8) 5.39 0.90
Private living space (X4) 5.07 0.94
Location facilities and services (X3) 4.82 0.93
Exterior design and space (X5) 4.74 1.02
Presence and availability of storage room (X9) 4.48 1.62
Table 4.22 The result of logistic regression analysis

Variable df Parameter estimates
Coefficients Wald Significance
Dependent
Purchased a house (No/Yes)
Intercept 1 -16.45 15.71 0.0001
Independent
Service quality (X1) 1 -0.17 0.25 0.62
Surrounding environmental attributes (X2) 1 0.244 0.615 0.43
Location facilities and services (X3) 1 1.43 22.21 0.000
Private living space (X4) 1 -0.17 0.54 0.46
Exterior design and space (X5) 1 0.25 1.26 0.26
Neighbourhood amenities (X6) 1 0.05 0.06 0.81
Aesthetics (X7) 1 1.06 7.77 0.005
Essential housing attributes (X8) 1 -0.01 0.001 0.97
Presence and availability of storage room (X9) 1 -0.01 0.001 0.97
Financial considerations (X10) 1 0.55 1.42 0.23
Diagnostics df Significant
Model Chi-square 10 69.94 0.0001
Block Chi-square 10 69.94 0.0001
-2 Log likelihood 160.74
2
Pseudo R (Nagelkerke) 0.43
Per cent correct predictions of have not purchased a
house 50.90
Per cent correct predictions of purchased a house 93.20
Overall per cent correct predictions 81.90
156
Table 4.22 shows the results of the logistic regression. These results indicate that the
test of the overall model with all ten variables against ‘purchased a house’ is
statistically significant, according to the model chi-square statistic (model chi-square
2
X2 = 69.94; df = 10; p = .000 < 0.05). Nagelkerke’s R = 0.43 which indicates a
moderate relationship between the ten variables and the purchase decision. The model
also predicts a high percentage (81.90) of the responses correctly. According to the
Wald criterion, two of the composite variables, location of facilities and services and
aesthetics made significant contributions to purchase decisions, and the other eight
variables have no significant influence on home buyers’ purchase decisions. The
predictive equation of logistic regression can be given as:
e1.432*Location 1.057* Aesthetics 16.452

P
1  e1.432*Location 1.057* Aesthetics 16.452
where P = the probability of making housing purchase decision
e= the base of natural logarithms (approx. 2.72)
1.43*location + 1.06*Aesthetics-16.45 = a linear equation=x
ex 1
The equation can now be expressed as: P   1 (Manning & Munro,
1 e x
1  ex
2007)
The probability of making a decision to purchase is positively influenced by the value

of ex. The value of ex is positively influenced by location and aesthetics. The
coefficients of these two predictors were 1.43 and 1.06 respectively, and this indicated
a positive relationship between these two housing attributes and the probability
of making a decision to purchase. Setting the value of “location” = 1, “Aesthetics” =
1, and “location” = 7, “Aesthetics”7, then obtain the range of P value is
from .000000855 to 0.73.
.000000855 < P < 0.73
157
The findings for the sub-hypotheses are summarised below:
1. H1a: Consumers’ purchase decisions are influenced by the environment
surrounding residential houses. The Wald statistic (z) is equal to 0.62 and the
p value is equal to 0.43 > 0.05. Therefore this hypothesis is rejected; consumers’
residential house purchase decisions were not significantly influenced by the
environment surrounding residential houses.
2. H1b: Consumers’ purchase decisions are influenced by the location of facilities

and services. This hypothesis was supported with p = .000 < 0.05, and the Wald
statistic of location facilities and services equal to 22.21. Coefficients of this
predictor was 1.43 which implies a positive relationship between this housing
attribute and home buyers’ purchase decisions. Thus, location of facilities
and services (location attributes) influenced consumers to purchase
residential houses.
3. H1c: Consumers’ purchase decisions are influenced by private living space

attributes. This hypothesis was rejected because p = .464 > 0.05, and z = 0.54.
Private living space had no significant influence on consumers’ purchase
decisions.
4. H1d: Consumers’ purchase decisions are influenced by exterior design and space.
Because p = 0.26 > 0.05, z = 1.26, this hypothesis was rejected. Housing exterior
design and space had no significant influence on purchase decisions.
5. H1e: Consumers’ purchase decisions are influenced by neighbourhood amenities.

This hypothesis was rejected as p = 0.81 > 0.05, z = 0.06. Neighbourhood
amenities did not significantly influence consumer purchase decisions.
6. H1f: Consumers’ purchase decisions are influenced by housing aesthetics.

P = 0.01 < 0.05, z = 7.77, so this hypothesis was supported. The coefficient of
158
this predictor was 1.06 which indicates a positive relationship between this
independent variable and the dependent variable. Therefore, housing
aesthetic attributes had a significant positive influence on purchase decision.
7. H1g: Consumers’ purchase decisions are influenced by essential housing

attributes. The p value of the prediction “essential housing attributes” was equal
to 0.97 which exceeded 0.05, and z = 0.001. Therefore, this hypothesis has been
rejected; consumers’ purchase decisions were not significantly influenced by
essential housing attributes.
8. H1h: Consumers’ purchase decisions are influenced by presence and availability

of storage room. This hypothesis is rejected since p = 0.97 > 0.05, z = 0.001.
Presence and availability of storage room had no significant influence on
consumers’ purchase decisions.
9. H1i: Consumers’ purchase decisions are influenced by financial considerations.

The p value of this predictor is 0.23, the Wald statistic was equal to 1.42. This
hypothesis has been rejected; consumers’ financial considerations had no
significant influence on their purchase decisions.
10. H2: Consumers’ purchase decisions are influenced by the quality of services
provided by suppliers. This hypothesis is also rejected since p = 0.62 > 0.05, and
z = 0.25. Consumers’ purchase decisions were not significantly influenced by the
quality of services.
Testing results for Hypothesis 1:

Home buyers’ purchase decisions were influenced by two housing attributes: location
attributes and aesthetic attributes positively influenced consumers’ to purchase
159
residential house(s). Other housing attributes did not have a significant influence on
purchase decisions. Hence, Hypothesis 1 is partly supported.
Testing result for Hypothesis 2:

The service quality provided by suppliers had no significant influence on home buyers’
purchase decisions. Therefore, Hypothesis 2 is rejected.
Summary: Housing attributes and home buyers’ purchase decisions
Table 4.23 The results of Hypotheses 1 and 2

Hypothesis
Number Construct Hypotheses Result
H1: Housing attributes influenced home buyers’ purchase decision.
1. Attributes of surrounding
environment (X2) Rejected
2. Location of facilities
and services (X3) Supported
3. Private living space (X4) Rejected
4. Exterior design and space (X5) Rejected
5. Neighbourhood amenities (X6) Rejected
6. Aesthetics (X7) Supported
7. Essential housing attributes
(X8) Rejected
8. Presence and availability of
storage rooms (X9) Rejected
9. Financial considerations (X10) Rejected
Rejected
H2: Service quality provided by suppliers influenced home buyers’ purchase decisions.
1. Service quality (X1) Rejected
4.5.2 Testing Hypothesis 3 regarding demographics
This section presents the results for Hypothesis 3 regarding the influence of
demographic variables on consumers’ evaluations of the housing attributes and
service quality across the full data set. Although residential housing is the family’s
largest single asset and sometimes in China the housing purchase decision is a joint
160
decision in the family, the volume of housing purchased by individuals increased to
47% of total housing sales at the end of 2011 (China Real Estate Statistics Yearbook,
2012). This research focuses on investigating the effect of individual differences on
purchasing behaviour (discussed in Section 2.5.3). MANOVA is an acceptable way to
carry out a standard ANOVA on each of the dependent variables, where there are
likely to be interactions or combined effects of the independent variables on
dependent variables. Thus, MANOVA has been employed to analyse the full data set
regarding Hypothesis 3. As discussed in Section 3.6.5, two step were followed to test
H3. The results are reported without post hoc testing or adjustment because of the
limited number of groups for most of the demographic variables (Field, 2009).
H3: Demographic variables influence consumers’ evaluations of housing attributes

and service choices in house purchase decisions.
Based on the literature review (Section 2.5.3), the demographic variables in this
research included: gender, age, marital status, education, occupation, total family
annual incomes, number of children, and family size. This section applies multivariate
analysis of variance (MANOVA) to test how the influence of housing purchase factors
on home buyers’ purchase decisions is affected by these demographic variables.
Therefore, a total of eight sub-hypotheses was prepared to test for Hypothesis 3:
Consumers’ evaluation of housing attributes and service choice in housing purchase
decisions is influenced by
H3a: The gender of consumers.
H3b: The age of consumers.
H3c: The marital status of consumers.
H3d: The educational background of consumers.
H3e: The occupation of consumers.
H3f: The family annual incomes of consumers.
H3g: The number of children in a family of consumers.
H3h: The family size of consumers.
161
The variables undergoing multivariate analysis of variance are listed in Table 4.24.
Table 4.24 Variables in Hypothesis 3

Home buyers purchase
Demographic segment on housing purchase factors (IV) decision (DV)
Gender
Age
Marital status
Housing attributes Education Purchase decision
and services Occupation
Annual income
Child
Family size
IV = independent variable, DV = dependent variable
Table 4.25 Output stage 1: Box's M test of equality of covariance matricesa

Gender Age Marital status Education
Box's M 82.06 Box's M 239.40 Box's M 75.79 Box's M 304.44
Sig. 0.02 Sig. 0.03 Sig. 0.10 Sig. 0.37
Occupation Annual incomes Children Family size
Box's M 263.99 Box's M 202.80 Box's M 81.83 Box's M 304.95
Sig. 0.36 Sig. 0.24 Sig. 0.03 Sig. 0.12
a. Tests the null hypothesis that the observed covariance matrices of the dependent variables are
equal across groups.
b. Design: Intercept + independent variables
Multivariate analysis of variance assumes that the variance-covariance matrices are

homogenous. To evaluate whether the full data were homogenous, Box’s M tests were
conducted as the first stage of testing Hypothesis 3. The standard criterion for
homogeneity of variance-covariance matrices is that p > 0.001. Table 4.25 presents
the first stage of output regarding Box’s M test. All the p values in the Box’s M test
exceeded 0.001. The Box’s M test results were therefore not significant, and so the
assumption of homogeneity of the variance-covariance matrices was judged to have
not been violated. Table 4.26 (see next page) shows the results of the tests of
162
Table 4.26 Output stage 2: tests of between-subjects effects
Dependent Marital Annual
Gender Age Education Occupation Children Family size
variable status incomes
Purchased
houses
Service
Wilks' Lambda 0.32 0.68 1.85 1.60 1.76 0.54 1.66 3.26
p value 0.57 0.64 0.16 0.16 0.13 0.75 0.19 0.01
Surrounding
environment
Wilks' Lambda 0.20 2.09 6.05 1.13 2.32 0.24 0.93 0.94
p value 0.66 0.07 0.00 0.40 0.05 0.94 0.40 0.46

Location
Wilks' Lambda 0.64 0.91 0.04 2.37 7.16 0.24 1.64 1.10
p value 0.43 0.48 0.96 0.04 0.00 0.95 0.20 0.37
Private living
space
Wilks' Lambda 0.17 0.97 1.44 0.68 2.29 1.06 1.09 1.03
p value 0.68 0.44 0.24 0.64 0.05 0.39 0.34 0.40
Exterior design
and space
Wilks' Lambda 0.43 1.19 1.67 1.54 0.49 1.20 0.37 1.03
p value 0.51 0.32 0.19 0.18 0.78 0.31 0.69 0.40
Neighbourhood
amenities
Wilks' Lambda 0.17 1.15 0.55 0.82 2.11 1.03 0.54 0.47
p value 0.68 0.34 0.58 0.54 0.07 0.40 0.59 0.80
Aesthetics
Wilks' Lambda 0.15 0.49 1.38 3.39 1.96 1.00 0.79 0.72
p value 0.70 0.78 0.26 0.01 0.09 0.42 0.46 0.61

Essential
housing
attributes
Wilks' Lambda 0.69 1.68 1.60 2.13 1.89 0.65 0.13 0.54
p value 0.41 0.14 0.21 0.07 0.10 0.66 0.88 0.75
163
Storage room
Wilks' Lambda 2.01 1.68 0.11 0.65 1.86 0.51 2.01 0.24
p value 0.16 0.14 0.89 0.66 0.11 0.77 0.14 0.95

Financial considerations
Wilks' Lambda 6.94 5.61 0.51 1.88 1.78 5.54 1.41 2.82
p value 0.01 0.00 0.60 0.10 0.11 0.00 0.25 0.02
Did not
purchased
Service
Wilks' Lambda 3.09 0.52 0.91 1.55 1.36 0.85 1.30 0.99
p value 0.09 0.72 0.34 0.20 0.26 0.52 0.28 0.44
Surrounding
environment
Wilks' Lambda 0.09 1.51 0.72 1.48 1.13 0.61 0.95 0.77
p value 0.77 0.22 0.40 0.22 0.36 0.70 0.40 0.57

Location
Wilks' Lambda 4.03 0.91 4.05 1.17 2.37 0.91 4.13 0.78
p value 0.05 0.47 0.05 0.34 0.05 0.48 0.02 0.57
Private living
space
Wilks' Lambda 0.70 2.07 0.79 0.59 1.12 0.99 0.35 1.28
p value 0.41 0.10 0.38 0.67 0.36 0.43 0.71 0.29
Exterior design
and space
Wilks' Lambda 0.51 0.28 0.03 0.38 1.07 0.95 0.46 0.49
p value 0.48 0.89 0.86 0.82 0.39 0.46 0.64 0.78
Neighbourhood
amenities
Wilks' Lambda 0.32 4.99 0.31 0.23 0.78 1.36 1.21 1.12
p value 0.58 0.00 0.58 0.92 0.57 0.26 0.31 0.36
Aesthetics
Wilks' Lambda 0.28 2.10 2.13 0.38 2.10 0.38 1.55 0.98
p value 0.60 0.10 0.15 0.82 0.08 0.86 0.22 0.44
164
Essential
housing
attributes
Wilks' Lambda 0.08 2.30 0.13 1.16 1.12 0.60 0.32 0.54
p value 0.78 0.07 0.72 0.34 0.36 0.70 0.73 0.75
Storage room
Wilks' Lambda 1.54 2.54 1.76 1.20 0.85 0.68 1.07 0.62
p value 0.22 0.05 0.19 0.33 0.52 0.65 0.35 0.68

Financial considerations
Wilks' Lambda 4.92 1.33 1.39 1.89 1.65 3.61 3.78 0.99
p value 0.03 0.27 0.24 0.13 0.17 0.01 0.03 0.43
Note: the mean difference is significant at the 0.05 level
between-subjects effects. The Wilk’s criterion and p values were used to test the
significance of the differences of perceived importance of housing attributes among
different demographic groups. Results are presented, (1) for respondents who had
already purchased homes (n=326), and (2) for respondents who had not yet purchased
a home (n = 106). By comparing the effects that these demographic differences had on
how housing attributes/services influenced decisions about whether or not to purchase
a house, one can draw conclusions about demographic influences on purchase
decisions.
Demographic one: gender

Table 4.26 shows that for existing house owners, there is only one significant
difference, namely in relation to financial considerations. This finding suggests that
the purchase choice of female house owners is more influenced by financial
considerations than the purchase choices of males. Furthermore, for potential home
buyers, financial considerations also presented significant differences between males
and females. This finding suggests that: for potential home buyers, females also
165
attached more importance to financial considerations than males. In all, females,
perceived financial considerations were more important than they were for males.
This applied both to house owners (made purchase decision) and potential home
buyers (did not make purchase decision). This indicates that although the importance
of financial considerations was significantly different between males and females,
consumers’ final purchase decisions were not significantly influenced by this
difference. In summary, the results suggest that overall, gender difference has no
significant influence on consumers’ purchase decisions. Thus H3a is rejected.
Demographic two: age

As shown in Table 4.26, for the data set of existing house owners, there is only one
significant difference – financial considerations. This finding suggests financial
considerations influence younger house owners’ purchase choices more than they
influence older house owners’ choices. Furthermore, for potential home buyers, only
one attribute, neighbourhood amenities, had significantly different results for younger
respondents and older respondents. This finding suggests younger potential home
buyers’ purchase choices are more influenced by neighbourhood amenities than the
choices of older potential home buyers. Overall, the outcomes suggest that the
purchase decisions of younger consumers were more influenced by the two factors of
neighbourhood amenities and financial considerations than those of older
consumers. This provides partial support for H3b.
Demographic three: marital status

For existing house owners, there is only the one factor – surrounding environment,
that showed a significant difference between married and unmarried house owners.
This finding suggests that the purchase choices of married house owners were more
influenced by the surrounding environment than the purchase choices of single
respondents. For married and unmarried potential home buyers, none of the attributes
had a significantly difference. This finding implies that, for potential home buyers, the
166
influences of the ten attributes are equal for single respondents and married
respondents. In summary, the results suggest that, overall, the purchase decisions of
married consumers are more influenced by surrounding environment than those of
single consumers. This provided partial support for H3c.
Demographic four: education background

Table 4.26 shows that for existing house owners, the location attributes and aesthetics
attributes had significant differences between the higher education group and the
lower education group. This finding suggests that the purchase choices of house
owners who have higher educational qualifications are more influenced by location
and aesthetics than the purchase choices of those who have lower educational
qualifications. For potential home buyers, no attributes presented significant
differences. This finding implies that the influences of the ten attributes are equal for
potential home buyers with different educational backgrounds. This result suggests
that overall, the purchase decisions of consumers who have a higher educational
qualifications are more influenced by both location attributes and aesthetics
attributes than the purchase decisions of consumers who have lower qualifications.
Partial support is therefore provided for H3d.
Demographic five: occupation

For existing house owners, there are three significant differences of surrounding
environment, location attributes and private living space. The results suggest that the
purchase choices of house owners who work in state-owned enterprises and public
service units are more influenced by these three attributes than those of house owners
who work in other sectors. For potential home buyers, there were no significant
differences in any attributes. This suggests that the purchase choices of consumers
who work in state-owned enterprises and the public service are more influenced by
three attributes – surrounding environment, location of facilities and private living
167
space than those of consumers who work in other places. This provides partial
support for H3e.
Demographic six: family annual incomes

Table 4.26 shows that for existing house owners, financial considerations have more
influence on the purchase choices of consumers with low incomes than they do on the
choices of consumers with high incomes. This is also the case for potential home
buyers. For both house owners and potential home buyers, although the importance of
financial considerations was significantly different between lower income groups and
high income groups, consumers’ final purchase decisions were not significantly
influenced by this difference. The outcome suggests that, overall, annual income level
does not have a significant impact on purchase decisions. Hence H3f is rejected.
Demographic seven: family status (with versus without children)

Table 4.26 indicates that, for the existing house owners segment, there was no
significant difference for any attributes. This finding suggests that the influences of
the ten attributes are equal for house owners both with and without children. For
potential home buyers, there were significant differences for two attributes: location
attributes and financial considerations. This finding suggests that location attributes
and financial considerations have more influence on the purchase choices of potential
home buyers who do not have children than they have on the purchase choices of
potential home buyers who do have children. Overall, the findings suggest that, the
purchase decisions of consumers without children are more influenced by location
attributes and financial considerations than the decisions of consumers with
children. Hence, partial support is provided for H3g.
Demographic eight: family status differences (family size)

Table 4.26 shows that for the existing house owner segment, family size has a
significant effect on both service quality and financial considerations. This finding
168
suggests that the purchase choices of house owners with smaller families (i.e. three
members or fewer) are more influenced by service quality and financial
considerations than the choices of house owners with larger families. For potential
home buyers, there were no significant differences for any attributes. This finding
indicates that, for potential home buyers, family size has no effect on the influences of
the ten attributes. In all, service quality and financial considerations have more
influence on consumers with smaller families than they have on consumers with
larger families. This provides partial support for H3h.
Summary: Influence of demographics on purchase decisions.
Table 4.27 The results for Hypothesis 3

H3: Demographic variables influence consumers’ evaluation of housing attributes and
service choices in housing purchase decisions.
1. gender Rejected
2. age Supported
3. marital status Supported
4. education background Supported
5. occupation Supported
6. family annual incomes Rejected
7. with versus without children Supported
8. family size Supported

Age, marital status, educational background, occupation and family status all had
significant influences on home buyers’ purchase decisions; gender and income did not
have significant influences on home buyers’ purchase decisions.
169
Figure 4.3 Demographics influences on purchase decision
H
H3a3a
Gender
Younger consumer H
H33bb:: N
Neeig
ighhbboorrh
hoooodd aam
meennititie
iess,, ffin
inaannccia
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sid
ideerraatitio
Married consumer HH3c3c:: SSuurr onn
rroouunnddin
ingg en
envviriroonnm
men entt
Consumer with higher H

H3d3d:: Location
Location attributes
attributes and
and aesthetics
aesthetics attributes
attributes
degree
H
H3e3e:: Surrounding
Surrounding environment,
environment, location
location attributes
attributes Purchase decision
State owned enterprise and and
and private
private living
living space
space
public service employees
H
H33ff n
eraattiioon
Incomes ia ll c
coonnssiidder
c a
finaannci
uteess,, fin
tioonn aattttrriibbut
loccaati
H33gg::lo
H
Consumer with children
H
H3h3h:Service
:Service quality,
quality, financial
financial consideration
consideration
Smaller family size
4.5.3 Testing Hypothesis 4 and Hypothesis 5: relationships

between housing attributes and post-purchase satisfaction
levels
As discussed in Section 3.6.5, Hypothesis 4 and Hypothesis 5 test the relationships

between the ten housing purchase factors and post-purchase satisfaction. All the
interval independent and dependent variables in these two hypotheses satisfy
assumptions of normality. Thus, multiple linear regression is most suitable to test
these two hypotheses.
Testing Hypothesis 4 and Hypothesis 5

H4: The overall post-purchase satisfaction of consumers with their purchase
decisions is influenced by their evaluations of housing attributes.
170
H5: The overall post-purchase satisfaction of consumers with their purchase
decisions is influenced their evaluations of the service quality provided by suppliers.
Based on the results of factor analysis in Section 4.3.2, ten new variables were
generated for residential house attributes and service quality. Therefore, in total ten
sub-hypotheses were prepared to test in this section.
The overall satisfaction of consumers with their purchase decision is influenced by
their perceptions of the following housing attributes and service quality provided by
marketers:
H4a: Surrounding environment.
H4b: Location facilities and services.
H4c: Private living space attributes.
H4d: Exterior design and space.
H4e: Neighbourhood amenities.
H4f: Aesthetics attributes.
H4g: Essential housing attributes.
H4h: Presence and availability of storage room.
H4i: Consumers’ financial considerations.
H5: Service quality provided by suppliers.
In total, 326 out of 432 respondents had purchased residential house(s), while the
other 106 respondents had not yet done so. To test the relationships between
consumers’ evaluations of housing attributes and their post-purchase satisfaction, the
sample of existing house purchasers was used (i.e. n = 326). The variables in the
model of multiple linear regression in these two hypotheses are described in Table
4.28 (see next page). The dependent variable in this multiple linear regression is
consumers’ post-purchase satisfaction levels. The independent variables in this
multiple linear regression are the ten new variables regarding consumers’ evaluations
of housing attributes and service quality. Table 4.28 shows the reduced mean scores of
171
house purchase factors. Most of the standard deviations of the 10 interval variables in
Table 4.21 are less than 1.70, indicating the close similarity of the perspectives of
respondents, as discussed in Section 4.4.1.
Table 4.28 Variable description in Hypothesis 4 and Hypothesis 5
Variable Variable description

Response to the question: Overall, to what
Post-purchase satisfaction extent do you think your house was a ‘good
buy’?
Service quality (X1) Response to the questions 5.1-5.10
Attributes of surrounding environment (X2) Response to the questions 3.2-.3.7
Location of facilities and services (X3) Response to the questions 4.3- 4.10
Private living space (X4) Response to the questions 1.4-1.7
Exterior design and space (X5) Response to the questions 2.1-2.4
Neighbourhood amenities (X6) Response to the questions 4.1and 4.2
Aesthetics (X7) Response to the questions 1.9,1.10 and 3.1
Essential housing attributes (X8) Response to the questions 1.1-.1.3
Presence and availability of storage room (X9) Response to the questions 1.8
Financial considerations (X10) Response to the questions 1.11and.1.12
Multiple regression is a more sophisticated extension of a straight line regression that

involves N independent variables. The standard form of multiple linear regression
allows researchers to relate two or more independent variables to a single dependent
variable when all measures are on interval or ratio scales. Researchers define the order
of entry for the variables based on theory related to Hierarchical (Sequential)
Multiple Linear Regression. At each step one or more independent variables may be
added. The analysis then reports the changes in the strength of the relationship
between the set of independent variables and the dependent variables at each step of
the analysis. Another form of multiple linear regression is that of Stepwise Multiple
Linear Regression. Its goal is to determine the subset of independent variables that
can best explain the variance in the dependent variable. Stepwise multiple regression
is a procedure which selects independent variables for the regression equation in the
direct order of the amount of variance that can be explained in the dependent variable.
172
It constructs the regression equation by first choosing the independent variable that
explains the largest proportion of the variance in the dependent variable. It then
chooses the independent variable that explains the second-largest proportion of the
variance, and so on (Malhotra 2010). This study employs Stepwise Multiple
Regression to test Hypotheses 4 and 5 to find out the relationship between
post-purchase satisfaction and consumers’ evaluations of housing attributes and
service quality, in order to identify the most parsimonious set of predictors of
post-purchase satisfaction, using a set of ten independent variables.
Table 4.29 Multiple Regression model summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
1 0.63a 0.40a 0.39 0.80
2 0.71b 0.50b 0.49 0.73
3 0.74c 0.54c 0.54 0.70
4 0.76d 0.58d 0.57 0.67
a. Predictors: (Constant), Surrounding environment

b. Predictors: (Constant), Surrounding environment, Aesthetics
c. Predictors: (Constant), Surrounding environment, Aesthetics, Service
d. Predictors: (Constant), Surrounding environment, Aesthetics, Service, exterior design and space
173
Table 4.30 ANOVA summary
Model Sum of Squares Df Mean Square F Sig
1. Regression 81.93 1.00 81.93 129.11 0.0001
Residual 125.01 324.00 0.64
Total 206.94 325.00
2. Regression 103.29 2.00 51.65 97.67 0.0001
Residual 103.64 323.00 0.53
Total 206.94 325.00
3. Regression 112.17 3.00 37.39 76.94 0.0001
Residual 94.77 322.00 0.49
Total 206.94 325.00
4. Regression 119.40 4.00 29.85 66.16 0.0001
Residual 87.54 321.00 0.45
Total 206.94 325.00
Table 4.31 Multiple regression model coefficients
Unstandardised Standardised t Sig.
Coefficients Coefficients
Model B Std. Error Beta
1 (Constant) -0.61 0.43 -1.40 0.162
Surrounding environment 0.84 0.07 0.63 11.36 0.0001
2 (Constant) -3.42 0.59 -5.78 0.0001
Aesthetics 0.64 0.10 0.35 6.36 0.0001
3. (Constant) -4.27 0.60 -7.10 0.0001
Aesthetics 0.565 0.10 0.32 5.82 0.0001
Services quality 0.358 0.08 0.25 4.27 0.0001
4. (Constant) -4.38 0.58 -7.55 0.0001
Aesthetics 0.53 0.09 0.30 5.63 0.0001
Services quality 0.35 0.08 0.24 4.35 0.0001
Exterior design and space 0.21 0.05 0.21 4.00 0.0001
174
The nine composite variables and one single variable were entered into the regression
model. Using all the ten variables, a total of 57.7 per cent of the variance in
post-purchase satisfaction can be explained (See Table 4.29). Surrounding
environment produced 39.6 per cent of the total variance in post-purchase satisfaction
explained by the independent variables that were evaluated. Surrounding environment
was the most significant variable for explaining variance in post-purchase satisfaction.
Surrounding environment, housing aesthetics attributes, service quality provided by
suppliers and housing exterior design and space contributed 57.7 per cent of the
variance in consumers’ post-purchase satisfaction.
Based on the outcome of the multiple regression (see Table 4.31), it can be seen that
there are significant regression coefficients for surrounding environment, housing
aesthetics, service quality provided by suppliers, and housing exterior design and
space (P < 0.05). For housing surrounding environment, sri2 = 0.27; for housing
aesthetics attributes, sri2 = 0.26; for services quality provided by suppliers, sri2 = 0.20;
and for housing exterior design and space, sri2 = 0.19. With these four predictors
entered into the equation, the multiple correlation coefficient (R = 0.76) was
significantly different from zero, F (4, 321) = 29.85, p < 0.05. These four composite
variables had a significant positive influence on home buyers’ post-purchase
satisfaction levels, and the other six composite variables did not have a significant
influence on home buyers’ post-purchase satisfaction. Based on the multiple linear
analysis the equation describing the relationship between the variables is:
Post-purchase satisfaction = - 4.38 + 0.39 * surrounding environment + 0.53 *
Aesthetics + 0.35 *service quality provided by suppliers + 0.21 * housing exterior
design and space.
Testing results for Hypothesis 4:

Home buyers’ levels of post-purchase satisfaction were influenced by their
evaluations of certain housing attributes. Three housing attributes, surrounding
175
environment, exterior design and space attributes and aesthetics positively
influenced home buyers’ post-purchase satisfaction. The coefficients of correlation or
the relationships between these three attributes and post-purchase satisfaction were
0.39, 0.21, and 0.53 respectively. Other housing attributes did not have a significant
influence on post-purchase satisfaction levels.

The evaluations of service quality provided by suppliers had a significant influence on
home buyers’ post-purchase satisfaction. The coefficient of correlation for the
relationship between service quality provided by suppliers and post-purchase
satisfaction level was 0.35.
Summary: The relationship between housing purchase factors and home buyers’
post-purchase satisfaction
Table 4.32 The results for Hypotheses 4 and 5

H4: The overall satisfaction of consumers with their purchase decisions is influenced by their
evaluations of housing attributes
1. Surrounding environmental
attributes (X2) Supported
2. Location facilities
and services (X3) Rejected
4. Exterior design and space (X5) Supported
(X8) Rejected
storage room (X9) Rejected
9. Financial consideration (X10) Rejected
H5: The overall satisfaction of consumers with their purchase decision is influenced their
evaluations of the service quality provided by suppliers.
1. Service quality (X1) Supported
176
4.6 Summary of research results
This research used five hypotheses to investigate the housing market in Wuhan. It
investigated the relationship between housing attributes and home buyers’ purchase
decisions, and the relationship between housing attributes and service quality on the
one hand, and home buyers’ post-purchase satisfaction levels on the other. Table 4.33
presents the research hypotheses and their relationships with independent and
dependent variables (see next page). In brief, the findings are: location facilities and
services and housing aesthetic attributes positively influence home buyers’ purchase
decisions; home buyers’ purchase behaviour varies across demographic segments: age,
marital Status, education backgroud, occupation, and family status influence home
buyers’ purchase decision; and home buyers’ post-purchase satisfaction is positively
influenced by surrounding environment, aesthetic attributes, exterior design and space,
and service quality.
4.7 Conclusion
This chapter presented the results of the data analysis. First, preliminary data analysis
techniques including cleansing and screening of data and demographic characteristics
of respondents were applied. Factor analysis was used to extract ten new housing
purchase factors and Cronbach’sAlphas were described. Techniques of analysis to test
the accuracy of data in terms of sampling outliers and normality were applied to
create the new composite variables. Descriptive statistics of the independent and
dependent variables were presented. Because the types of the dependent variables in
testing for the purchase decision stage and the post-purchase satisfaction stage were
different, multiple data analysis methods were needed for testing these hypotheses.
Logistic regression analysis, multivariate analysis of variance (MANOVA) and
multiple linear regression (MLR) were employed to test the five research hypotheses.
The results of these statistical tests could help China’s residential housing industry to
identify the preferences of home buyers so that marketers can offer appropriate
housing products and services in the future.
177
Table 4.33 The test results of research hypotheses
Hypotheses
H1: Housing attributes influenced home buyers’ purchase decisions.
attributes (X2) Rejected
and services (X3) Supported
4. Exterior design and space (X5) Rejected
(X8) Rejected
Rejected
H2: Service quality provided by suppliers influenced home buyers’ purchase decisions.
2. Service quality (X1) Rejected
H3: Demographic variables influence consumers’ evaluation of housing attributes and service
choices in housing purchase decisions.
1. gender Rejected
2. age Supported
3. marital status Supported
4. education background Supported
5. occupation Supported
6. family annual incomes Rejected
7. with versus without children Supported
8. family size Supported
H4: The overall satisfaction of consumers with their purchase decisions is influenced by their
evaluation of housing attributes.
attributes (X2) Supported
and services (X3) Rejected
4. Exterior design and space (X5) Supported
7. Essential housing attributes Rejected
178
Hypotheses
(X8)
H5: The overall satisfaction of consumers with their purchase decisions is influenced their
1. Service quality(X1) Supported
179
CHAPTER 5 CONCLUSIONS AND IMPLICATIONS
5.1 Introduction
This thesis has been concerned with the following research problem:
suppliers influence home buyers purchase decisions and post-purchase satisfaction
in China?
To address this problem a research model was developed following a review of the
extant literature. The model comprised five components consistent with the three key
phases in the consumer decision-making (CDM) framework. Three components
(housing attributes, housing service quality and demographics) relate to the factors
influencing home buyers’ purchase decisions. The house purchase decision
component relates to the purchase decision-making aspect of the CDM framework.
The fifth component – satisfaction with the house purchase decision – is consistent
with CDM post-purchase satisfaction.
Five research questions arose from this research problem:

significantly influence home buyers’ purchase decisions in China?
evaluation of housing attributes and their service choices in China?
Research question 5: Do services provided by the suppliers significantly influence
home buyers' levels of satisfaction with their purchase decisions in China?
180
To address these research questions, the thesis was set out in five chapters:
Chapter 1 introduced the research by providing background information related to
the need to examine consumers’ decision-making in the Chinese housing market. The
economic significance of the housing market in China, as well as the growing
sophistication of consumers in the housing market, were highlighted. The academic
significance of the research problem was outlined.
The pertinent literature was reviewed in Chapter 2. The “five-stage model” of the
consumer purchase decision-making process was explained step by step, as were
individual and environmental influences on consumers’ decision-making. Consumers’
housing purchase choices were discussed, followed by an overview of China’s
housing market. The gaps in extant research were identified and the research problem
formulated. Findings from the literature review in this chapter formed the basis of the
research model. An outcome of Chapter 2 was the development of a set of hypotheses.
The methodology for undertaking the research was developed in Chapter 3, which
presented quantitative methods used for data collection and data analysis. The
principal method was a mail-based survey of Wuhan potential home buyers and house
owners who were members of Wuhan residential housing companies. The members
were chosen by employing a stratified sampling procedure based on selecting 100
members from each company based on the 20 companies’ member lists.
Chapter 4 presents the results of statistical tests on data from the questionnaire. The
four major statistical analyses used were principal component analysis, logistic
regression, multivariate analysis of variance and multiple linear regression.
This final chapter discusses conclusions regarding the research hypotheses and the
research problem. Implications and contributions to theory and practice are also
181
detailed. Finally, limitations of the research and opportunities for further research are
considered. An overview of this chapter is presented in Figure 5.1.
Figure 5.1 Structure of Chapter 5
5.1 Introduction
5.2.1 Conclusion of hypothesis 1

5.2 Conclusions about the 5.2.2 Conclusion of hypothesis 2
research hypotheses 5.2.3 Conclusion of hypothesis 3
5.2.4 Research hypotheses 4 and 5
5.3 Conclusion about the

research problem
5.4 Contributions of the

research and implications for
theory
5.4.1 implications for commodity

5.5 Implications for policy housing industry
and practice 5.4.2 implications for home-buyers
5.4.3 Implications for government
5.6 Limitations of the

research
5.7 Opportunities for further

research
5.8 Conclusion
182
5.2 Conclusions about the research hypotheses
An in-depth rationale for the five hypotheses was provided in Chapter 2 after the
conceptual foundations for the research model were set out. Statistical results in
relation to the hypotheses were presented in Chapter 4. Conclusions regarding each of
these five hypotheses will now be drawn by briefly comparing the results for each
hypothesis with the literature. Figure 5.2 (see next page) below presents the final
tested model with significant relationships between the variables of interest.
5.2.1 Conclusion for Hypothesis 1:
H1: Consumers’ residential house purchase decisions are influenced by housing

attributes.
The findings for Hypothesis 1 regarding housing attributes were presented in Section
2.5.3. Of the 10 housing and service attributes potentially influencing housing
purchase decisions, only two – location and aesthetics – significantly influenced
consumers to purchase residential housing in China.
As discussed in Chapter 4, housing location consisted of eight items: close to

shopping centre, close to food court, close to social activity centres, on a main street,
on a downtown street, close to public transport, close to workplace, and close to other
community services.
Housing location attributes positively influenced consumers to purchase residential

housing in Wuhan. This finding is similar to those of many previous studies on home
buyers. Many researchers also suggest that location on a main street, location on a
183
Figure 5.2 Final tested model with significant paths

alternatives of residential housing decision satisfaction
Surrounding environment
Exterior design and space
Aesthetics H4
Location attributes
Aesthetics decision Level
H2
Housing service quality H5
H
H3a3a
Gender
Younger consumer H
H33bb:: N
Neeig ighhbboouur
rhhoooodd am
ameennititie
iess,, ffin
inaannccia
iall ccoonns
H sid
ideerraatitio
Single consumer H3c3c:: SSur
urroroun
undi
onn
ng
ding enenvi
viro
ronm nmen entt
Consumer with higher H

H3d3d:: Location
Location attributes
attributes and
and aesthetics
aesthetics attributes
attributes
degree
H
H3e3e:: surrounding
surrounding environment,
environment, location
location attributes,
attributes, Purchase decision
State owned enterprise and private
private living
living space
space and
and financial
consideration
public service employees
H
H33ff
rattiioonn
nsiiddeera
Incomes
n aan
ncciiaall ccoons
tess,, ffiin
ttrriibbuute
:loocca
attiioonn aatt
H33gg:l
H
Consumer with children
H
H3h3h:Service
:Service quality,
quality, financial
consideration
Smaller family size
Unbroken lines indicate significant paths; broken lines indicate non-significant paths.
184
downtown street, location close to public transport, and location close to workplace
are the most important selection criteria when home buyers purchase houses (Chay &
Greenstone, 2005; Opoku & Abdul-Muhmin, 2010; Pasha & Butt, 1996; Wang & Li,
2006; Yusuf & Resosudarmo, 2009).
Aesthetics were measured by three indicators: modern layout and decorative style,
architectural materials, and air quality of the living area. Housing aesthetic attributes
also had a significant influence on home buyers’ purchase decisions in Wuhan. This
result is consistent to some extent with previous studies investigating the influence of
home buyers’ perceptions of overall housing living condition attributes on their
purchase decisions (Bitter et al., 2007; Greene & Ortuzar, 2002; Opoku &
Abdul-Muhmin, 2010; Pope, 2008).
On the other hand, the other seven housing attributes, which include surrounding
environment, private living space, exterior design and space, neighbourhood
amenities, essential attributes, storage room, and financial considerations, had no
significant influence on home buyers’ purchase decisions in Wuhan. This is an
interesting finding on home buyers’ purchase decisions in China’s urban areas.
Some past studies have suggested that in China’s residential housing industry,
financial considerations are the key factor in predicting home buyers’ purchase
decisions in first-tier cities (such as Guangzhou and Beijing). The housing purchase
choices for people in these metropolises are quite price-sensitive. Based on the
literature investigating housing purchase choices in China, the researchers extrapolate
an average increase in the price of a dwelling of 10 per cent brings about a 15.2 per
cent reduction in the probability of purchase in these first-tier cities (Wang & Li, 2006;
Wang, 2011; Wang, Yang & Liu, 2011).
However, financial considerations are not a significant influence on home buyers’
185
purchase decisions in Wuhan. This may be for the following two reasons:
1. The regional gaps of affordability in China. The higher ratio of housing price to
household income in first-tier cities means a more serious affordability problem exists
in second-tier cities (as discussed in Section 2.4.1.4). However, according to the
report by the China Real Estate Statistical Yearbook (2011), the ratio of housing price
to household income in Wuhan in 2011 was 9.90, which is below the ratio of 10.87 for
China’s 35 main cites as a whole. The report implies that residential housing
affordability was not as serious an issue in Wuhan.
2. A house is always seen as the largest single asset of most households and provides
residents with personal security, independence and privacy in China. Most
householders in China believe investing in housing is their ultimate dream and the
best financial investment (China Real Estate Statistic yearbook, 2012). Although the
Chinese residential housing industry experienced a contraction in 2007, 2008 and at
the beginning of 2009, the industry revived after 2009 and residential house prices
and the size of the total saleable housing area has continued to increase in most
Chinese main cities since then (as discussed in Section 2.4.1.3). At the same time, for
home buyers who want to purchase a residential house in order to live in it, in recent
years the Chinese government has provided encouragement by establishing laws to
protect home buyers’ benefits, for example by implementing a series of measures to
curb unfair sales and speculation, by zeroing in on private marketers' opaque sales
tactics and exaggerated advertising claims practices, and by requiring Chinese banks
to supply home buyers with prime mortgage rates (China Real Estate Statistics
Yearbook, 2010 & 2011).
In this situation, most Chinese residents recognised that the residential housing
industry was the fastest growing market and are confident the value of housing will
climb steadily in the future. They believe the risks involved in purchasing housing for
owner occupation are low, and so investment in housing products is popular (Fung et
186
al., 2010; Rao & Zhou, 2010; Wang et al, 2011).
The finding that housing location and aesthetics influence home buyers’ purchase
decisions supports findings in the literature about the importance of perceptions of
housing attributes when home buyers make purchase decisions (Bitter et al., 2007;
Greene & Ortuzar, 2002; Opoku & Abdul-Muhmin, 2010; Wang & Li, 2006). In brief,
the results of the testing of this hypothesis support the existence of a predictive path
between housing attributes and home buyers’ purchase decisions in Wuhan. This
outcome makes a unique contribution to the literature, because prior to this study, this
hypothesis has not been tested in Wuhan.
H2: Consumers’ purchase decisions are influenced by the service quality provided
by suppliers.
Hypothesis 2 regarding the influence of the quality of services provided by suppliers

was first presented in Section 2.5.3. Service quality in this study involved five
dimensions: reliability, empathy, responsiveness, tangibles and assurance. Ten
assessment tools based on these dimensions were generated (see Section 2.3.4.4):

2. Dependability in handling home buyers’ service problems
4. Secure housing transactions
5. Employees who are consistently courteous
6. Employees having the home buyers’ best interests at heart
7. Employees who understand the needs of home buyers
8. Convenience of service office hours
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10. Availability of after sales service
For this hypothesis, the results of logistic regression analysis indicated there was no
relationship between the quality of the services provided by suppliers and home
buyers’ purchase decisions in the Wuhan residential housing market. This research is
the first comprehensive test of the relationship between service quality and home
buyers’ purchase decisions in China. Based on past studies in some western countries,
the perception of service quality is taken to be a home buyer’s evaluation of the
service he/she receives compared to what they expected to get. Home buyers are
thought to view the quality of service on a much broader basis, and they expect high
service quality to be provided by house builders when they making purchase decisions
(Atterhög, 2005; Forsythe, 2008; Nahmens & Ikuma, 2009; Torbica & Stroh, 1999 &
2001). The outcomes of the tests for this hypothesis conflicted with the results of
these previous studies.
The small number of previous studies which investigate the relationship between
housing service quality and housing purchase choice in Asia (Indonesia: Yusuf &
Resosudarmo, 2007; Hong Kong: Lam, 2007) suggest outcomes similar to those of
the present study. Lam’s (2007) findings support the belief that housing maintenance
services provided by suppliers hardly influence residents’ purchase choices in the
Hong Kong housing industry. Yusuf and Resosudarmo (2007) found that higher
service quality provided by builders did not increase consumers’ perceived value of
houses in Indonesia. This may be because of a serious housing affordability problem
in the Indonesian housing market, thus, home buyers were not willing to pay more for
better service (Tsai, 2012).
In brief, the findings of this study did not support the hypothesised link between the
quality of services provided by suppliers and consumers’ purchase decisions.
Although the hypothesis that service quality had a significant influence on home
buyers’ purchase decisions in the Wuhan housing market was not supported, other
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studies have shown that service quality is an important selection criterion for home
buyers and better quality of housing services could satisfy home buyers (Forsythe,
2008; Nahmens & Ikuma, 2009). Very few studies have explored the relationship
between quality of service and purchase decisions in China’s housing market.
H3: Demographic variables (gender, age, material status, education, occupations,

family annual income, number of children, family size) influence consumers’
evaluations of housing attributes and service choices in housing purchase decisions
in China.
Hypothesis 3 regarding demographic differences was first introduced in the literature
review in Section 2.5.3. Several researchers mention the influence of demographic
characteristics on home buyers’ purchase decisions in Asian countries (Opoku &
Abdul-Muhmin, 2010; Reed & Mills, 2007), however, they do not detail specific
demographic influences on home buyers’ final purchase decisions in the residential
housing market in China. Thus, this research is the first comprehensive test of specific
demographics in a residential housing industry in Asia.
Age, marital status, educational background, occupation and family status all
significantly influenced home buyers’ purchase behaviour; on the other hand, gender
and incomes did not have significant influences on home buyers’ purchase behaviour.
The findings of this research suggest the following conclusions:
1. Gender
This research found that although the importance of financial considerations varied
significantly according to gender, home buyers’ final purchase decisions were not
significantly influenced by these variations. Gender difference had no significant
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influence on consumers’ purchase decisions. This finding is quite different to the
results of past studies. One past study conducted in a western country found that
females were more influenced by interior layouts than men (Devlin, 1994). Another
study in an Asian country, Saudi Arabia, suggested the same finding, and also found
significant gender differences in the importance attached to private living space,
aesthetics, and exterior space. Females considered each of these attributes more
important than males did (Opoku & Abdul-Muhmin, 2010). This finding suggests that
the gender difference is not an important consideration when housing suppliers
implement marketing strategies in Wuhan.
2. Age
This research found that the purchase decisions of younger consumers were more
influenced by neighbourhood amenities and financial considerations than the
purchase decisions of older consumers in Wuhan. However, one past study which was
also conducted in China found that in Guangzhou, older home buyers showed greater
concern for neighbourhood attributes and living security, and that younger home
buyers attached more importance to location attributes. The findings of these two
studies are quite different. This may be due to the different conditions which prevail
in these two cities. As discussed in Section 2.3.3, social considerations have a
significant impact on the relative importance of housing attributes and a significant
influence on consumers’ final house purchase decisions.
3. Marital status
This research found that the purchase decisions of married consumers were more
influenced by surrounding environment than the decisions of single consumers. This
finding is very similar to the findings of Opoku and Abdul-Muhmin’s (2010) study in
Saudi Arabia. In general, married persons tend to be more concerned about
environmental attributes because of the importance of having an environment that is
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suitable for raising children.
4. Education
This research found that the purchase decisions of consumers who have higher
degrees were more influenced by location and aesthetics than the purchase decisions
of consumers who have lower qualifications. In China higher educational
qualifications are closely correlated with better jobs and belonging to higher
socio-economic groups (Wang & Li, 2006), and more highly educated consumers are
more willing to pay high premiums to reside in the inner core areas and good housing
(China Real Estate Statistics Yearbook, 2011). This finding is very similar to those of
past studies on housing purchase decisions in Saudi Arabia and northern Mexico
(Fierro et al., 2009; Opoku & Abdul-Muhmin, 2010). These studies suggested that
home buyers with higher educational qualifications valued location attributes such as
being close to workplace, close to public transport and close to shopping centres.
5. Occupation
The research found that the purchase decisions of consumers who worked in
state-owned enterprises and the public service are more influenced by three attributes,
surrounding environment, location and private living space, than the purchase
decisions of consumers who work in other places in Wuhan. This finding is consistent
with a study which found consumers working in state work units in both Beijing and
Guangzhou were more concerned than other workers were with surrounding
environment, and that in Guangzhou these consumers were also more concerned with
private living space (Wang & Li, 2006).
6. Family annual incomes
This research found that income level has no significant influence on consumers’
purchase decisions. This finding is quite different to those of past studies, which
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found that high-income groups preferred better surrounding environments and
convenient locations (Salama, 2006; Yusuf & Resosudarmo, 2009). Neary sixty per
cent (57.97 per cent) of the respondents’ total disposable family incomes were at the
low or middle-to-low levels – lower that 100,000 (RMB) per year, while 34.91 per
cent of respondents ranked in the middle and middle-to-high levels – between
100,000 and 200,000 (RMB). Only 7.11 per cent of respondents had high levels of
income – more than 200,000 (RMB) per year.
7. Family status
This research found that the purchase decisions of consumers without children are
more influenced by location and financial considerations than were the decisions of
consumers with children. This research also found that service quality and financial
considerations have more influence on consumers with smaller families than they
have on consumers with larger families. These findings are different from those of
past studies which have been conducted in both western and Asian countries. In Chile
(Greene & Ortuzar, 2002), England and Japan (Ozaki, 2002) family size and family
status were found to have no significant impact on the influence of any housing
purchase factors on housing purchase decisions. The literature summarised in Section
2.3.3.3 indicates that the relative importance of various housing attributes varies
across national contexts, and that different social and cultural considerations heavily
influence consumers’ housing purchase decisions (e.g. Jabareen, 2005; Fierro,
Fullerton & Donjuan-Callejo, 2009). Thus, the findings in this research regarding
family status reflect the unique characteristics in the Wuhan residential housing
market. When comparing home buyers without children or with smaller families to
those with children or with larger families it is clear that the former groups tend to
have less demand for housing than the latter groups. Consequently, the former groups
tend to have stricter purchase choice criteria in location attributes and service quality,
and to be more concerned with keeping cost to an acceptable level.
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What warrants mention here is that purchase behaviour was not significantly
influenced by income level in Wuhan. Most (57.97 per cent) of the respondents’
family total disposable incomes were at the low and middle-to-low levels – lower than
100,000 (RMB) per year, while 34.91 per cent of respondents ranked in the middle
and middle-to-high levels – between 100,000 and 200,000 (RMB). And only 7.11 per
cent of respondents had high level incomes – more than 200,000 (RMB) per year.
This result is consistent with the result for Hypothesis 1, which is that financial
considerations had no significant influence on home buyers’ purchase decisions in
Wuhan. There are two reasons for this:
1. Housing affordability is less of a problem in Wuhan than it is in many other major
cities in China. The housing affordability ratio was 9.90 in 2011 in Wuhan, below the
average ratio for main cities in China.
Table 5.1 Housing affordability in some main cities in China, 2011
Beijing Shanghai Guangzhou Chengdu Wuhan Average of main
(1st tier ) (1 tier) (1 tier) (2 tier) (2 tier) city
Housing affordability
13.04 13.14 12.74 9.93 9.90 10.87
ratio
Source: Adapted from China Real Estate Yearbook, 2011 & 2012
2. Chinese consumers’ preference for investing in housing products. Home buyers in

China perceive purchasing housing for the purpose of occupancy to be low risk, and
believe that the Chinese housing industry will continue to grow steadily in the future,
as discussed in Section 5.2.1.
The findings of this research indicate that consumers with different annual income
levels exhibited no significantly different purchase behaviour in Wuhan. Some past
studies have pointed out that in some countries high income groups were prepared to
pay more for better surrounding environments and convenient locations. These
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attributes imply higher total housing prices (Yusuf & Resosudarmo, 2009), which lead
to affordability problems for low income groups in those housing markets. However,
affordability is less of a problem in the Wuhan residential housing market; in addition,
the perceived low risk in investing in housing for the purpose of occupancy, and
growing housing values in China, might encourage home buyers to make purchase
decisions regardless of their income.
In summary, this research found that some demographic variables (age, marital status,
education backgrounds, occupation and family status) do have an effect on housing
purchase decisions in Wuhan. These findings make a contribution to the literature.
5.2.4 Conclusions for Hypothesis 4:
H4: The satisfaction of consumers with their purchase decisions is influenced by

their evaluations of attributes of the housing.
Hypothesis 4 regarding home buyers’ post-purchase satisfaction were tested using

multiple linear regression. This hypothesis was first discussed in Section 2.6.4.4. This
research is the first comprehensive test of the relationship between various housing
attributes and post-purchase satisfaction in the residential housing industry. Results
from testing this hypothesis support the existence of a predictive path between
housing attributes and home buyers’ post-purchase satisfaction. The findings suggest
that surrounding environment, aesthetics, and exterior design and space positively
influence home buyers’ post-purchase satisfaction levels.
Home buyers’ judgments of housing attributes may be different in the purchase

decision and post-purchase stages. In the purchase decision-making stage, home
buyers may be more willing to pay for the attributes which can have the most
impact on their perceived value of housing products as they tend to be value
maximisers (Greene & Ortuzar, 2002). After home buyers make the payment, they
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perceive the extent to which their house was a “good buy”, evaluate the various
housing attributes, and seek the ones which can most satisfy their needs and wants
(Nahmens & Ikuma 2009). These different judgments mean that different attributes
influence home buyers across the two stages. Home buyer post-purchase satisfaction
is therefore the result of Wuhan housing companies providing good products or
services which meet or exceed home buyers’ expectations. One housing attribute –
aesthetics was found to have a significant influence on both purchase decision and
post-purchase satisfaction. This finding suggests that aesthetic attributes deserve the
most attention when housing suppliers implement their marketing strategies.
5.2.5 Conclusions for Hypothesis 5:
H5: The satisfaction of consumers with their purchase decisions is influenced their
Hypothesis 5 was first discussed in Section 2.6.2.5. This hypothesis was tested
together with Hypothesis 4 using a multiple linear regression model. The results of
this model indicated quality of services provided by suppliers had a significant
influence on home buyers’ post-purchase satisfaction levels. Although service quality
provided by suppliers did not have a significant influence on home buyers in the
purchase decisions stage, it emerged as the most significant component in influencing
the post-purchase satisfaction. This may be because most housing companies in
Wuhan provide very similar regular services to home buyers (China Real Estate
Statistics Yearbook, 2011). The similarity of the regular services provided by most
suppliers may mean that home buyers do not believe they will get more benefits by
paying more money for different housing suppliers to get higher level of service
quality. As a result, home buyers were not willing to pay more for services in the
purchase decision stage. However, housing services are closely related to
householders’ daily lives (Torbica & Stroh, 2001). After they occupied the houses and
conducted their daily lives in their houses, the importance of service quality increases.
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For example, if a householder needs the service of improvements to facilities which
can make the house more suitable for existing use, then the service quality provided
by suppliers (such as their dependability in handling home buyers’ problems, their
readiness to respond to home buyers’ requests, and the convenience of service office
hours) is highly involved in the process of solving the householder’s problem.
This finding for Hypothesis 5 support previous studies to some extent. J.D. Power and
Associates report that although housing structure, workmanship, housing construction,
materials, housing price and it appreciate value can significantly influence house
buyers’ expectations of their new house, the services provided by sale staff and
housing daily maintenance services after sale were the most important two
contributors to householders’ overall satisfaction levels in Florida.
5.3 Conclusion about the research problem

The research problem investigated in this thesis was: “Which major residential
housing attributes and services provided by housing suppliers influence home
buyers’ purchase decisions and post-purchase satisfaction in China?”
The research findings provided an answer to this research problem by testing a

theoretical framework developed from the literature with data gathered from Chinese
housing consumers using four quantitative analytical techniques. The results of the
research indicate that housing location attributes and aesthetics have significant
positive effects on home buyers’ purchase decisions. Surrounding environment,
housing aesthetics, the quality of the services provided by suppliers, and housing
exterior design and space influence home buyers’ post-purchase satisfaction levels in
the Wuhan residential housing market.
Although some previous studies which had conducted in Asian coutries suggested that
housing price and payment methods should be the top considerations for home buyers
(eg: Opoku & Abdul-Muhmin, 2010; Wang et al., 2011), the empirical finding in this
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thesis discredits this viewpoint on the top priority of financial considerations for
house purchase decsion-making. From the findings of this thesis, financial
considerations are not the key factor influencing home buyers’ final purchase
decisions in Wuhan. This may be because housing affordability is less of a problem in
Wuhan, and becasue consumers believe there is a low risk in investing in housing
products for the purpose of occupancy (as discussed in Section 5.2.1)
In addition, this thesis also discussed the influences of demographic variables on

purchase decisions. The results indicate that some demographic variables including
age, marital status, educational background, occupation and family status had
significant impacts on home buyers’ purchase behaviour.
5.4 Contributions of the research and implications for

theory
The research presented in this thesis makes three contributions.
1. Firstly, this research contributes to the body of knowledge on consumers’
residential housing purchase decision making. The literature review ascertained that
home buyers’ purchase behaviours vary across national contexts and cultural
backgrounds (as discussed in Section 2.3.3). Since 2006, there have not been any
scientific studies that identify and quantify both housing attributes and services that
influence home buyers’ purchase decision processes in China. This gap in the
knowledge on home buyers’ purchase decisions is significant, considering the
growing importance of China’s residential housing industry and the huge investment
in this industry (discussed in Section 2.4.1). This research is the only known empirical
attempt to examine the direct relationships between housing attributes/services and
purchase decision-making and post-purchase satisfaction in an urban area of China in
recent years. Therefore, this study provides contributions to our understanding of
consumer decision-making processes for the residential housing market in China.
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2. Secondly, this research has generated a specific set of housing attributes for
China’s housing market. The housing attributes and service attributes identified in
extant theories and studies were included in a survey instrument administered to a
sample of Chinese home buyers in Wuhan. Factor analysis (PCA) was then used to
extract ten housing purchase factors pertinent to the Wuhan context. The ten purchase
factors were: quality of services provided by suppliers, surrounding environment,
location facilities and services, private living space, exterior design and space,
neighbourhood amenities, aesthetics, essential housing attributes, storage room and
financial considerations (discussed in Section 4.3). In a number of past studies,
residential housing purchase choice is often assessed by examining housing attributes
only. The ten factors examined in this research cover both house attributes and service
quality. The survey results and the method used for measuring these factors will be
useful for other researchers – both academic and industry-based.
3. Thirdly, this study demonstrates the use of a series of specific quantitative testing
methods, which differ from those of many previous studies. Principal component
analysis was used to extract housing factors from a mass of attributes; logistic
regression was used to examine how these housing factors influenced home buyers’
purchase decisions; multivariate analysis of variance was used to investigate how
demographic variables influenced home buyers’ purchase behaviour; and multiple
linear regression analysis was used to explore the relationship between housing
attributes/service quality and post-purchase satisfaction. This is the first time these
methods have been used together to examine the purchase decision process in China.
The use of multiple analytical methods in this research allowed for effective testing of
the five-component research model containing variables measured with different
scales.
5.5 Implications for policy and practice

The research outcomes will be disseminated in a number of ways to reach wider
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audiences: (1) as a post to consumer group websites (e.g.
http://www.realestate.cei.gov.cn/); (2) as a newsletter to inform housing
managers/marketers; (3) as scholarly papers at conferences and journals (e.g.:
Chinese Real Estate Journal). The outcomes of this research have some important
implications relating to management systems and operational activities in China’s
residential housing industry. There are also implications for home buyers, government,
academic teaching and research at universities. Each of these is discussed below.
5.5.1 Implications for the residential housing industry
The success of any business depends on understanding the key factors which
influence consumers’ purchase decisions and ensuring that consumers’ expectations
are met or exceeded (Kotler & Keller, 2009; Solomon, 2009). Therefore, the ten
variables listed in this thesis can be used as the key factors in the Wuhan’s residential
housing market. The housing marketers should realise the importance of the two
housing attributes of location and aesthetics in determining home buyers’ purchase
decisions. In addition, in order to fulfill home buyers’ expectations, marketers should
also recognise the importance of the following three house purchase factors: (1) The
environment surrounding houses (noise, width of road and passageways, greenery of
adjacent street, rain water drainage system, street lighting and presence of footpath);
(2) the quality of services provided by suppliers (reliability, empathy, responsiveness,
tangibles and assurance); and (3) housing exterior design and space (the appearance of
the house/building, presence of garden and size of garden, appearance of external
walls, and exterior spaces). Marketers should focus more effort and resources on these
housing purchase factors to meet home buyers’ needs, in order to achieve a
competitive advantage, maintain the satisfaction levels of current consumers and
attract new consumers (Parasuraman et al., 1985).
For attributes that have less influence on purchase decisions, such as neighbourhood
amenities, private living space, and presence and availability of storage room,
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marketers need to ensure they maintain acceptable standards to prevent home buyers
from being dissatisfied since the factors that trigger dissatisfaction are different from
the factors that lead to satisfaction (Nahmens & Ikuma, 2009)
Demographic characteristics are also a major influence on home buyers’ purchase

decisions and behaviour. This research indicated that age, marital status, educational
background, occupation and family status are important when developing marketing
and quality improvement. Marketers need to identify the characteristics of their target
segments and try to provide facilities and services to meet and satisfy home buyers’
needs and expectations. On the other hand, marketers could use this information to
target segments that will be more satisfied with the attributes they provide. In brief,
marketing managers should focus more on these five demographic variables and
provide suitable products and services for home buyers in Wuhan.
5.5.2 Implications for home buyers
The major practical implication of this thesis for home buyers is that it enables them
to make more informed decisions regarding their choice of residential house. Each of
the hypotheses in this study has implications for home buyers evaluating attributes
and services in the process of making a purchase decision. As housing suppliers
improve their provision of the salient attributes identified in this research, home
buyers will benefit. Home buyers could gain greater satisfaction from marketers
based on the findings of this thesis. For example, the research findings suggest that
the quality of services provided by suppliers and financial considerations influences
the purchase decisions of consumers with smaller families. If marketers use this fact
to target smaller families and focus on providing small dwellings and better services
to this population segment, the home buyers with smaller families may be satisfied
with this market change, and this may increase the probability of purchase.
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5.5.3 Implications for government
As discussed in Section 2.4.1.1, although real estate dealers currently have the rights
of land use, land ownership is still nominally in the hands of the state. The state still
plays the most important role in the real estate market in China, by issuing a series of
real estate adjustment measures such as modifying land policies and tax standards to
control real estate development (China Real Estate Statistics Yearbook, 2011). The
outcomes of this research could assist the government in determining the policies
needed to:
1. Require residential housing companies to provide information about housing

attribute alternatives modelled on the composite measures of housing and service
attributes developed in this research. The details of each housing factor could help
both potential home buyers and house owners to understand housing selection criteria
in general.
2. Encourage housing companies to identify and describe each housing purchase

factor’s value for existing consumers to guide prospective purchasers. This would
help ensure that home buyers make rational purchase decisions and maximise the
benefits they obtain.
3. Encourage residential house companies to improve some housing attributes which

are key factors influencing home buyers’ final purchase decisions. Government could
require companies to improve the quality of services to satisfy home buyers as well.
These activities may benefit consumers and accelerate economic development in
Wuhan.
4. Encourage housing companies to identify and target different demographic market

segments to better satisfy consumer needs. As discussed in Section 2.4.1, due to the
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large market demand and the substantial potential profits to be made, the major
target consumers of residential housing companies are those in the middle and high
income groups, and marketers lack motivation to cater for the lower end of the
housing market due to lower profitability, less competition (Rao & Zhou, 2010; S.
Wang et al., 2011). Although this research concluded that incomes are not a key factor
in home buyers’ purchase decisions in Wuhan, housing purchase behaviours vary
across socio-demographic sub-segments. Therefore, targeting different audiences,
especially lower income groups, may be a way for housing suppliers to capture new
markets to ensure ongoing competitiveness, while contributing to the government’s
social goals.
5. Move towards a more participatory leadership structure to increase government’s

involvement with the residential housing industry and to work with the housing
industry to develop specific regulations to control the growth of the housing market.
5.6 Limitations of the research

Doctoral dissertations are often constrained in their scope by a lack of resources, time,
or funding (Sekaran & Bougie, 2009). This research study was limited by these
factors, The researcher understand the limitations and the constraints, and have
managed to overcome them. This research was limited by all of these factors. The
following limitations need to be borne in mind, in order to appropriately interpret the
research results.
a. The first limitation is that this research only focused on individuals’ residential
housing purchase decision processes, which according to the trading volume of
housing by individuals had increased to 47% of total housing sales at the end of 2011
(China Real Estate Statistics Yearbook, 2012). The research did not investigate joint
housing purchase decisions in the family.
b. This research is especially constrained by the lack of time. DBA thesis need to be
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completed in 24 months. Thus, the second potential limitation of the research is that
the assessment of housing purchase factors was made in general terms only. For
example, the location attributes included some general items such as location close to
workplace, and location close to transport, but the study did not address this issue in
terms of the exact location preferred, due to this kind of statistic need very exact
answers, and need a very large sample size. The researcher had diversified the
variables in a widely range, the scope of the conceptual research model developed and
the associated research design to test the model is considered appropriate for this
DBA research.
c. The whole purchase decision process includes five stages: Problem recognition,
searching for information, evaluation of alternatives, purchase decision, and
post-purchase behaviour. However in some actual buying processes, consumers may
skip or reverse some stages (Blackwell, Souza, et al.; Quester et al., 2011). This thesis
examined how home buyers search, evaluate alternative housing purchase factors,
make the final purchase decision and perceive their post-purchase satisfaction. The
first step of the consumer decision-making process – problem recognition and
non-service related marketing stimuli, was not considered. It was also beyond the
scope of this research to investigate the whole post-purchase behaviour of home
buyers. However, home buyers’ purchase decision may stimulated by the market
demand, such as the housing price rise in the recently years, home buyers’ make an
investment purchase decision. So, excluding the first two step of consumer decision
process, and only focusing on the last three steps can more exactly reflect home
buyers’ rational purchase decisions about housing attributes in a fully market-oriented
environment. This contributes to more accurate outcomes for this research object.
d. The review of the literature showed that the relative importance of various housing
attributes varies across national contexts, and social and cultural conditions heavily
impact consumers’ eventual housing decisions. The outcomes of this research pertain
to the Wuhan housing market. The findings differed somewhat from past studies
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conducted in other metropolises in China, such as Beijing, Shanghai and Guangzhou.
Hence, the outcomes of this research cannot be generalised to the whole housing
market in China.
5.7 Opportunities for further research

This research has contributed to the existing knowledge about purchase decisions in
the residential housing industry in China and so has laid the foundation for further
research in this country and in other Asian countries. To overcome the above
limitations and to gain further insights into the purchase decisions of home buyers in
China and Asia, a number of further research opportunities are suggested.
a. Although individual home-buying has increased rapidly in recent years, joint

decision-making takes up a high percentage (nearly 53 per cent) of the trading volume
in the residential housing industry in China (China Real Estate Statistics Yearbook,
2012). It would be valuable to investigate which factors are subject to joint
decision-making, and which are the domain of individual decision-making. For
example in a couple’s decision-making process, which decisions are made by
husbands and which are made by wives?
b. As mentioned in Section 5.6, the assessment of housing purchase factors was done
in general terms in this study. Further research could consider this issue in terms of
specific questions related to housing attributes. This may enable suppliers to have
more ideas for effective housing design. For example, refer to variable “layout” ,
Wang & Li (2006) identified two types of layout: small living, with large bedrooms;
large living, with small bedrooms. They investigated home buyers’ choice probability
for both types. Extending Wang and Li (2006)’s study, this research found out the
location attributes positively influence home-buyers’ purchase decisions. Home
buyers’ purchase probability tends to be influenced positively by such location
attributes as “location close transport station”, “loction close to shopping centre”, etc.
The correlation between the distance between the home location to transport station
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and purchase probability will be in the scope of further research.
c. This study found that home buyers purchase decisions were not significantly
influenced by service quality, but this finding only can be applied in Wuhan
residential housing market. Very few studies had investigated the relationship between
service qualiy and home buyers’ purchase decision in Asia, it would be worth paying
attention on this issue for the further researchers.
d. Since the last stage of the real estate revolution in China, the residential housing
has become a commodity product in the whole China. Many factors may affect
buying motivations, such as increasing housing prices, and residential need
recognition. Although this research investigated home buyers’ rational purchase
decisions about housing attributes in a fully market-oriented environment, the current
residential housing market is still a complex segment of China’s economy. Many
home buyers’ purchase decisions may also be affected by other market stimulation
factors. For example, due to housing prices steadily increasing in the past few years,
some consumers purchase houses as an investment. Therefore, a study comparing
consumer housing purchases for residential versus investment purposes is warranted.
e. It would be worth examining investors’ purchasing and post-purchase behaviour for

further researchers. For example, do home buyers actually use the housing for
residential or investment purposes? Do they invest in the property to increase its
value? What role does property play in Chinese consumers wealth management
planning compared with that of Western countries’ consumers?
5.8 Conclusion
This chapter has summarised all aspects of this research project, from research
objectives, problems, theoretical framework and hypotheses to research results,
implications, contributions and limitations. The research problem investigated in this
research was “Which major residential housing attributes and services provided by
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housing suppliers influence home buyers’ purchase decisions and post-purchase
satisfaction in China?” The research adopted a (partial) consumer decision-making
model and tested it in the Chinese context by conducting a surveyin the Wuhan
housing market. This research found that housing location attributes and aesthetics
positively influence home buyers’ purchase decisions in Wuhan. It also found that,
surrounding environment, housing aesthetics, service quality provided by suppliers
and housing exterior design and space influenced home buyers’ post-purchase
satisfaction levels. In addition, the results suggest that five demographic
characteristics, age, marital status, educational background, occupation and family
status influence home buyers’ purchase behaviour.
All of these outcomes make a potential contribution to the residential housing industry
in Wuhan and provide marketers with more basic and broader understandings of their
consumers, thus providing a foundation to improve the housing industry in practice.
Finally, this is a rigorous study with a sound methodology, and has provided
contributions for theory, practice and further research.
206
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Zhou, Jingkui. (2011). Uncertainty and housing tenure choice by household types:
Evidence from China. China Economic Review 22(3), 408-427
Zikmund, William G., & Babin, Barry J. (2009). Essentials of Marketing Research
(4th ed.). Australia: South-Western Cengage Learning.
Zikmund, William G., Babin, Barry J., Carr, Jon C., & Griffin, Mitch. (2010).
Business Research methods (8th ed.). USA: South-Western, CenGage
Learning.
227
Appendices
Appendix 1: Questionnaire in English Version
Appendix 2: Questionnaire in Chinese Version
Appendix 3: List of the residential housing companies in Wuhan
Appendix 4: The remained housing attributes and services attributes with factor
loadings greater than 0.5
228
Appendix 1 Questionnaire – English Version
Survey Questionnaire
ATTRIBUTES INFLUENCING HOME BUYERS’ PURCHASE DECISIONS
Dear Survey Respondent,
Thank you very much for agreeing to participate in this research on attributes
influencing home buyers purchase decision. The aim of this survey is to investigate
the attributes and perceptions of home buyers in Wuhan. The results of this study will
improve housing builders’/service suppliers’ understand home buyers’ purchase
choice criteria and their satisfaction levels with housing attribute performances, so
that may provide the right products and services to home buyers.
Your answers will be kept completely confidential. You are not required to provide
your name or any other identifying information in the questionnaire. Because the data
will be gathered for statistical purpose, it is important that each questionnaire be
completed and returned. Thank you again for your help!
Guidelines published by Southern Cross University Human Research Ethics

Committee (HREC) were adopted for the survey questionnaire. The HREC
considered and approved the research proposal associated with this thesis research.
229
Hence, the entire research process was scrutinised by an appropriate ethics authority.
The Approval Number of this research was: ECN-12-142.
Best Regards
Rong, Zeng (Researcher)
International Office SCU, PO Box 42

Tweed Heads, New South Wales, 2485, Australia
Telephone: +61 421 801 203
Email: tq01w09zr@hotmail.com
230
Introduction
This questionnaire consists of two sections: (1) home buyer opinions on housing
attributes and service quality; (2) background information. To answer each question,
please circle the appropriate number to indicate your response. Please answer all these
questions.
Section 1 Home buyers’ opinion

In question 1 to 5, to what extent do the following housing attributes influence your
decision to buy a residential house?
Please to rate the importance of each statement about housing attributes based on your
evaluation of the statement. Please circle the appropriate number.
Question 1 Housing Intrinsic attributes

Statement Please circle response
Not at all important/ Extremely important
Strongly disagree Strongly agree
↓ ↓
1.1 Dwelling type (Apartment, Duplex and Villa) is
1 2 3 4 5 6 7
important when you purchase
1.2 Area of structure of the house is important when you

1 2 3 4 5 6 7
purchase
1.3 Age of the house is important when you purchase 1 2 3 4 5 6 7
1.4 Size of living room is important when you purchase 1 2 3 4 5 6 7
1.5 Size of kitchen and dining room are considered as

1 2 3 4 5 6 7
important attributes when making purchase decision
1.6 Number and size of bedrooms is important for home

1 2 3 4 5 6 7
buyers
1.7 Number and size of bathrooms is important when

1 2 3 4 5 6 7
you purchase
231
1.8 Availability of storage room is an important attribute
1 2 3 4 5 6 7
influence purchase decision
1.9 Layout & Decorate style of the house is important

1 2 3 4 5 6 7
when you purchase
1.10 Architectural Materials is also an important

1 2 3 4 5 6 7
attribute when choosing a house.
1.11. Housing price is important when you purchase 1 2 3 4 5 6 7
1.12 Payment in terms is important when you purchase 1 2 3 4 5 6 7
Question 2 Extrinsic attributes

↓ ↓
2.1 The appearance of the house/building is important

1 2 3 4 5 6 7
for home buyers when making a purchase decision
2.2 Presence of garden and size of garden is important

1 2 3 4 5 6 7
when you purchase
2.3 External walls is important when you purchase 1 2 3 4 5 6 7
2.4 Exterior spaces refer to public area, such as the
public aisle, elevator, recreation room is important when 1 2 3 4 5 6 7
you purchase
232
Question 3 Environment attributes
↓ ↓
3.1 Air quality of the living area is considered as an
1 2 3 4 5 6 7
important attribute when making a purchase decision
3.2 Surrounding noise is considered when making a

1 2 3 4 5 6 7
purchase decision
3.3 Width of road and passages is considered when

1 2 3 4 5 6 7
making a purchase decision
3.4 Greenery of adjacent street is considered when

1 2 3 4 5 6 7
making a purchase decision.
3.5 Rain water drainage system is considered when

1 2 3 4 5 6 7
making a purchase decision.
3.6 Street lighting is considered when making a

1 2 3 4 5 6 7
purchase decision.
3.7 Presence of footpath is considered when making a

1 2 3 4 5 6 7
purchase decision
Question 4 Location facilities and services

↓ ↓
4.1 Location close to schools and nurseries is
important for home buyers when making a purchase 1 2 3 4 5 6 7
decision.
4.2 Location close to health centre and hospital is 1 2 3 4 5 6 7
233
important for home buyers when making a purchase
decision.
4.3 Location close to shopping centre is important

1 2 3 4 5 6 7
when you purchase
4.4 Location close to food court is important when

1 2 3 4 5 6 7
you purchase
4.5 Location close to sports facilities, library, and
social activities centres et al. is important when you 1 2 3 4 5 6 7
purchase
4.6 Location on a main street is important when you

1 2 3 4 5 6 7
purchase
4.7 Location on a downtown street is important when

1 2 3 4 5 6 7
you purchase
4.8 Location close to public transport is important

1 2 3 4 5 6 7
when you purchase
4.9 Location close to workplace is important when

1 2 3 4 5 6 7
you purchase
4.10 Other community services such as refuse

collection, public phone is important when you
1 2 3 4 5 6 7
purchase
Question 5 Service quality

↓ ↓
5.1 Providing service as promised is important when
1 2 3 4 5 6 7
you purchase
234
5.2 Dependability in handing home buyers’ service
1 2 3 4 5 6 7
problems is important when you purchase
5.3 Readiness to respond to home buyers’ requests is

1 2 3 4 5 6 7
5.4 Secure housing transaction is important to home

1 2 3 4 5 6 7
buyers is important when you purchase
5.5 Employees who are consistently courteous is

1 2 3 4 5 6 7
5.6 Employees having the home buyers’ best interests

1 2 3 4 5 6 7
at heart is important when you purchase
5.7 Employees who understand the needs of their home

1 2 3 4 5 6 7
buyers is important when you purchase
5.8 Convenience of service office hours is important

1 2 3 4 5 6 7
when you purchase
5.9 Employees who have a neat, professional

1 2 3 4 5 6 7
appearance is important when you purchase
5.10 Availability of after sales service is important

1 2 3 4 5 6 7
when you purchase
Question 6 Have you purchased a residential house(s)? Please circle response:

1) Yes 2) No
Question 7 If you have purchased a house already, please answer the following
question:
Not at all Extremely so
↓ ↓
Overall, to what extent do you think your house was a

1 2 3 4 5 6 7
"good buy”
235
Section 2 Background information
8. What is your gender?
1) Male; 2) Female
9. What is your age?

1) 25 years old or below 2) 25-34 years old 3) 35-44 years old
4) 45-54 years old 5) 55-64 years old 6) 65 years old or above
10. What is your marital status?

1) Single 2) Married 3) Others……… (Please
specify)
11. What is your highest educational qualification?

1) Primary school 2) Secondary school 3) Diploma/Polytechnic
4) Bachelor Degree 5) Master degree 6) Doctorate degree
7) Others……… (Please specify)
12. What is your occupation?

1) Government employee 2) Employee of state-owned enterprise
3) Private business employee 4) Public service unit
5) Business owner 6) Others……… (Please specify)
13. What is your family’s total disposable income per year (RMB)?
1) 50,000 or under 50,000 2) 50,000-99,999 3) 100,000-149,999
4) 150,000- 199,999 5) 200,000-249,999 6) 250,000 or over 250,000
14. How many children do you have?

1) 0 2) 1 3) 2
4) More than 2
236
15. How many people live in your house (or family size)?
1)1 2) 2 3) 3
4) 4 5) 5 6) More than 5
16. Please use the following blank space to make additional comments, and anything
you might want to add about this survey will be valuable. Please use this space and
feel free to attach additional sheets if necessary.
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
……………………………….
Thank you very much! The survey is now completed. Thank you
for your cooperation.

PS: If you would like to receive a copy of the survey results, please write or mail to
me at the address provided in the cover letter.
237
Appendix 2 Questionnaire – Chinese Version
关于住宅商品房属性选择的调查问卷
亲爱的顾客，您好：
非常感谢您能参与这份研究调查。这份问卷列举了住宅商品房的若干属性，请您根据
您自己的经验判断每个属性在您购房选择时的重要程度。这份调查的结果将帮助房地产商了
解到您对住宅商品房的选择标准和满意程度。这份问卷是匿名的，您的回答将绝对保密，
非常感谢您的合作！
调研者：曾嵘
地址：武汉市解放大道 1277 号
电话号码: +61 421 801 203 +86 13554239617
邮箱地址: tq01w09zr@hotmail.com
238
第一部分您对住宅商品房的选择
您的回答分成 7 个标准，重要程度从 1 到 7 依次递进，请根据以下每个问题的属性描述，在
您认为适合的数字上划圈
1．商品房的本质属性
请在 1-7 中选择一个适合的数字划圈
完全不重要非常重要
↓ ↓
1.1 房屋类型（公寓，复式楼，别墅）在您购房时是
1 2 3 4 5 6 7
否重要
1.2 建筑面积的大小在您购房时是否重要 1 2 3 4 5 6 7
1.3 商品房的建筑年龄（新旧程度） 1 2 3 4 5 6 7
1.4 客厅的大小 1 2 3 4 5 6 7
1.5 厨房和餐厅的大小 1 2 3 4 5 6 7
1.6 卧室的数量和大小 1 2 3 4 5 6 7
1.7 洗浴间的数量和大小 1 2 3 4 5 6 7
1.8 是否有储藏室或储藏室的实用性 1 2 3 4 5 6 7
1.9 房间的整体布局或房型的结构 1 2 3 4 5 6 7
1.10 商品房的建筑材质 1 2 3 4 5 6 7
1.11. 商品房的价格 1 2 3 4 5 6 7
1.12 购买时的付款方式 1 2 3 4 5 6 7
2．住宅商品房的外在属性
↓ ↓
2.1 整个楼层的视觉外观 1 2 3 4 5 6 7
239
2.2 是否带花园和花园的大小 1 2 3 4 5 6 7
2.3 外墙的外观 1 2 3 4 5 6 7
2.4 公共区域，例如走道宽敞程度，电梯的载客能力，
1 2 3 4 5 6 7
娱乐室，小区的大小等等
3．住宅商品房周围的环境因素
↓ ↓
3.1 周围的空气质量 1 2 3 4 5 6 7
3.2 周围环境避免太多噪音 1 2 3 4 5 6 7
3.3 周围街道和通道的宽敞程度 1 2 3 4 5 6 7
3.4 周围街区的绿化 1 2 3 4 5 6 7
3.5 周围排水系统是否完善 1 2 3 4 5 6 7
3.6 周围街道灯管是否明亮 1 2 3 4 5 6 7
3.7 周围是否存在人行横道 1 2 3 4 5 6 7
4．住宅商品房所处的地理位置
↓ ↓
4.1 商品房邻近学校和幼儿园 1 2 3 4 5 6 7
4.2 商品房邻近医院 1 2 3 4 5 6 7
4.3 商品房邻近购物中心 1 2 3 4 5 6 7
4.4 商品房邻近美食街 1 2 3 4 5 6 7
4.5 商品房邻近体育馆 1 2 3 4 5 6 7
4.6 商品房位于主要干道 1 2 3 4 5 6 7
4.7 商品房位于市中心 1 2 3 4 5 6 7
240
4.8 商品房邻近公共交通站（公交车站，地铁站等） 1 2 3 4 5 6 7
4.9 商品房邻近工作地点 1 2 3 4 5 6 7
4.10 商品房邻近其他社区服务点
1 2 3 4 5 6 7
5．房地产商提供的服务质量
↓ ↓
5.1 房地产商或物业管理部门能够提供他们许诺的商
1 2 3 4 5 6 7
品房服务
5.2 服务的可靠性 1 2 3 4 5 6 7
5.3 服务的及时性 1 2 3 4 5 6 7
5.4 服务的安全性 1 2 3 4 5 6 7
5.5 服务者的礼貌 1 2 3 4 5 6 7
5.6 服务者与您的沟通 1 2 3 4 5 6 7
5.7 服务者了解您的需要 1 2 3 4 5 6 7
5.8 能够在方便的时间联系到服务部门 1 2 3 4 5 6 7
5.9 服务者着装的整洁 1 2 3 4 5 6 7
5.10 售后服务的质量 1 2 3 4 5 6 7
6．您是否购买过住宅商品房？
1) 是 2) 不是
7．如果您已经购买过商品房，请回答这个问题
完全不满意非常满意
↓ ↓
整体上说，您对您购买的这套商品房是否满意 1 2 3 4 5 6 7
241
第二部分. 顾客背景信息
8. 您的性别
1) 男 2) 女
9. 您的年龄
1) 25 岁以下 2) 25-34 岁 3) 35-44 岁
4) 45-54 岁 5) 55-64 岁 6) 65 岁或以上
10. 您的婚姻状态
1) 未婚 2) 已婚 3) 其他……请注明)
11. 您的最高学历
1) 小学 2) 中学 3) 专科
4) 本科 5) 硕士 6) 博士
7) 其他……(请注明)
12. 您的职业
1) 政府部门工作 2) 国有企业工作 3) 私营企业工作
4) 事业单位工作 5) 自由商人，私企业主 6) 其他工作（请注明）
13. 您的家庭可支配年收入（人民币）

1) 50,000 或 50,000 以下 2) 50,000-99,999 3) 100,000-149,999
4) 150,000- 199,999 5) 200,000-249,999 6) 250,000 或高于
250,000
14. 您有几个孩子
1) 0 2) 1 3) 2
4) 多于 2 个
242
15. 您的家里住着几个人
1)1 2) 2 3) 3
4) 4 5) 5 6) 多于 5
16. 如果您对商品房选择方面还有其他方面的评论，您可以在下面空白处列举出
来
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
……………………………….
调查完毕，谢谢您的合作
附注：如果您想得到调查的最终结果，您可以通过我的邮箱地址联系我。
243
Appendix 3 List of the residential housing companies in Wuhan
The name of major 20 housing companies in Wuhan:

1. Wuhan Di Chan Group Company
2. Wuhan Fu Xing Hui Yu Ltd.
3. Wuhan An Ju Engineering Group
4. Hubei Great Wall Real Estate Group
5. Wuhan Wang Ke Ltd.
6. Jin Di Real Estate Group Company
7. Wuhan Bao An Real Estate Development Co. Ltd.
8. Wuhan New World Kang Ju Development Co. Ltd
9. Wuhan Hong Yu Real Estate Group Company
10. Wuhan Langold Real Estate Group Company
11. Wuhan Bao Li Real Estate Development Co. Ltd.
12. Wuhan Best Wishes Real Estate Development Co. Ltd.
13. Hubei New Yangtze River Real Estate Group Company
14. Wuhan Kai Le Group Company
15. Hubei Modern Real Estate Group Company
16. Wuhan Da Hua Real Estate Group Company
17. Wuhan Three River Real Estate Development Co. Ltd.
18. Wuhan Jia Hai Ltd.
19. Hubei Ren Xin Real Estate Development Co. Ltd.
20. Wuhan Jian Gong Real Estate Group Company
244
Appendix 4 The housing attributes and services attributes with factor loadings
greater than 0.5
Communalities
Initial Extraction
Type of house 1.000 .675

Lot size 1.000 .735
Age in years 1.000 .522
Livingroom size 1.000 .602
Kitchen & dining room size 1.000 .726
Number & size of bedrooms 1.000 .619
Number & size of bathroom 1.000 .699
Availability of storage room 1.000 .700
Layout & decorate style 1.000 .523
Architectural materials 1.000 .711
Appearance of the house 1.000 .777
Presence of garden and
1.000 .621
size of garden
Appearance of external
1.000 .733
walls
Public area 1.000 .584
Air quality of the living area 1.000 .540
Surrounding noise 1.000 .636
Width of road 1.000 .642
Greenery of adjacent street 1.000 .679
Water drainage system 1.000 .594
Street lighting 1.000 .707
Presence of footpath 1.000 .683
Location close to schools
1.000 .718
and nurseries
Location close to health
1.000 .726
centre and hospital
Location close to shopping
1.000 .679
centre
Location close to food court 1.000 .728
Location close to social
1.000 .646
activities centres
Location on a main street 1.000 .622
Location on downtown 1.000 .704
Location close to public
1.000 .581
transport
Location close to workplace 1.000 .645
245
Community services such
as refuse collection, public 1.000 .611
phone
Housing price 1.000 .605
Payment in terms 1.000 .618
Providing service as
1.000 .603
promised
Dependability 1.000 .720
Readiness 1.000 .725
Secure 1.000 .732
Consistently courteous 1.000 .645
Have best interest in heart 1.000 .717
Understand home-buyers'
1.000 .562
needs
Convenience of service
1.000 .650
office hours
Neat, professional
1.000 .595
appearance
After sales service 1.000 .580
Extraction method: principal component analysis.
246

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Southern Cross University

Attributes influencing home buyers' purchase

RESIDENTIAL HOUSING MARKET

Bachelor of International Economy and Trade, Wuhan University of

Science and Technology, Wuhan, China

Master of Finance, RMIT University, Melbourne, Australia

A thesis submitted to Southern Cross Business School, Australia, in

partial fulfillment of the requirements for the degree of

Doctor of Business Administration

Date: December, 2013

Candidate: Rong Zeng

ABS Australian Bureau of Statistics.

DECLARATION OF ORIGINALITY ......................................................................................ii

LIST OF ABBREVIATIONS ................................................................................................ iv

TABLE OF CONTENTS ....................................................................................................... v

LIST OF FIGURES ......................................................................................................... xiii

LIST OF TABLES ............................................................................................................ xv

LIST OF APPENDICES ...................................................................................................xvii

CHAPTER 1 INTRODUCTION TO THE RESEARCH ............................................................... 1

1.1 Chapter objective and structure ............................................................................ 1

1.2 Research background ........................................................................................... 1

1.3 Research problem and hypotheses ....................................................................... 3

1.4 Justification for the research ................................................................................ 6

1.5 Research methodology ......................................................................................... 8

1.6 Definition of terms ............................................................................................... 9

1.7 Delimitations of scope ........................................................................................ 11

1.8 Outline of the thesis............................................................................................ 12

1.9 Summary ............................................................................................................ 14

CHAPTER 2 LITERATURE REVIEW ................................................................................. 15

2.1 Introduction ........................................................................................................ 15

2.2.2 Model of consumer behaviour ..................................................................... 19

2.2.3 Purchase decision-making process .............................................................. 21

2.2.3.1 Problem recognition stage........................................................... 21

2.2.4.1 Individual influence .................................................................... 32

2.3.1 Introduction of global housing market ........................................................ 39

2.3.1.1 Definition of housing market ...................................................... 39

2.3.3 Consumer housing purchase choice ............................................................ 44

2.3.3.1 Hedonic model of housing .......................................................... 45

2.3.4.1 Categories of service mix............................................................ 56

2.4.1 An overview of China’s residential housing sector ..................................... 66

2.4.1.1 General development of China’s real estate market ................... 67

2.4.2.1 Residential housing market expansion in Wuhan ....................... 78

2.5.1 Gaps in the literature.................................................................................... 81

2.6 Research problem: Theoretical framework and hypotheses .............................. 85

2.6.1 The proposed research model ...................................................................... 86

2.6.2 Hypothesis development.............................................................................. 87

CHAPTER 3 RESEARCH METHODOLOGY ........................................................................ 97

3.1 Introduction ........................................................................................................ 97

3.2 Survey research method ..................................................................................... 99

3.2.1 Survey instruments .................................................................................... 100

3.2.3 Limitations of the survey research method................................................ 103

3.3 Questionnaire design ........................................................................................ 103

3.3.1 Questions in the questionnaire ................................................................... 104

3.3.2 Question development ............................................................................... 104

3.3.3 Question and response formats .................................................................. 107

3.3.4 Level of scales measurement ..................................................................... 108

3.3.5 Physical characteristics .............................................................................. 109

3.4. Sampling.......................................................................................................... 109

3.4.1 Target population ....................................................................................... 109

3.4.2 Sampling frame.......................................................................................... 110

3.4.3 Sample size ................................................................................................ 111

3.4.4 Selection of sampling design – stratified sampling ................................... 111

3.4.5 Pilot study .................................................................................................. 112

3.5 Survey ethics and administration of survey ..................................................... 114