Journal of Economic and Social Thought

A review of the behavioural factors influencing the housing market

2024-06-02T19:36:34+00:00

The importance of the housing market to households and the economy is paramount to monetary policies. However, there is limited literature on the behavioural factors influencing the decision-making process in the housing market. This article profoundly examines the psychological and neurological factors influencing the housing market. It reviews how cognitive and emotional influences shape the householders, both sellers and buyers, decisions in the housing market. More importantly, we review the literature on neuroeconomics (and neurofinance) to initiate an understanding of how the brain could work in the housing market. In summary, the householders' reactions to information and news are consistent with behavioural finance theories. Householders tend to underreact to news regarding the housing market and often suffer from biases and heuristics. One of the critical effects that householders suffer from is an illusion of control; this could be traced to the emotions of householders towards the house. Householders do not just show positive emotions towards the property; they fall in love with it. This strong emotional bond is one reason buyers overpay and sellers overprice. Both governments and monetary policymakers need to understand the psychology influencing the householders' decision-making process mainly because the housing market is vital to the economy.

Keywords. Housing market; Behavioural economics; Neuroeconomics.

JEL. D10; D81; D87; D91.

The twilight of the Scandinavian model

2024-06-02T19:39:44+00:00

This article examines how the changing political landscape in Nordic countries (Denmark, Finland, Norway, and Sweden) is challenging the traditional understanding of the Scandinavian model. Once lauded for its stable party systems and successful welfare state, the region now faces increasing voter volatility and a decline in party loyalty. The analysis explores how social transformations, particularly the rise of a post-industrial society, are weakening the link between social class and political party choice. Studies of voting behavior show a rise in issue-oriented voting and a decline in traditional class voting patterns. This electoral dealignment is forcing parties to adapt and embrace "catch-all" strategies, while also contending with lingering ideological attachments among some voters. The article further highlights the rise of voter apathy and abstention, particularly among young people. This disengagement from the political process adds another layer of complexity to the changing nature of Nordic political behavior. Overall, the research suggests that the once-stable Scandinavian model is undergoing a significant transformation, demanding a reevaluation of how we understand Nordic politics and its future trajectory.

Keywords. Scandinavian model; Voter volatility; Party loyalty; Electoral dealignment; Post-industrial society.

JEL. A13; A14; A19; D72; P16.

Front Matter

2024-06-02T19:41:24+00:00

Front Matter