Can Perceptions of Property Market Volatility and Optimism Be Affected by Message Framing and Market...
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Transcript of Can Perceptions of Property Market Volatility and Optimism Be Affected by Message Framing and Market...
Can Perceptions of Property Market Volatility and Optimism Be Affected by
Message Framing and Market Familiarity?
Deborah Levy and Catherine Frethey-Bentham, The University of Auckland Business School, Auckland, New Zealand
Changha Jin, Hanyang University, Korea
ERES 2013: Vienna University of Technology4 July, 2013
• Introduction and Literature Review
• Methodology• Analysis and Results• Summary
Outline
Introduction and Literature Review
Introduction• Extant literature notes that the perceptions of
individuals are influenced by context or message framing
• A frame can be regarded as some combination of the beliefs, values, attitudes and mental models that people adopt to apprehend and comprehend a situation
• The frame significantly affects how individuals infer meaning and hence understand a situation
Introduction
• Literature also identifies differences in judgements between decision makers within familiar and unfamiliar markets
• This study combines these two phenomena to see if media effects differ when decisions are being made by decision makers within familiar and unfamiliar markets
Literature Review
Media Effects• Price, Tewkesbury & Powers (1997), Pruitt, Reilly &
Hoffer (1988), Soroka (2006) identified media effects
Property Related• Huge & Hoffman (2008) found a relationship between
the amount and type of media coverage and public perceptions in the context of the housing market
• Jin & Gallimore (2010) confirmed that positive and negative framing can act to alter people’s market perceptions of the same market scenario
• Case & Shiller (2003) confirmed the existence of media effects and the term ‘bubble’
Literature Review
Positive vs Negative Effects
• Levin (1987), Levin & Gaeth (1988)
• Maheswaran & Meyers-Levy (1990)
Literature Review
Familiar and Unfamiliar markets• Diaz & Hansz, 1997 - experts operating in
geographically unfamiliar markets were influenced by anonymous expert opinions
• Diaz & Hansz (2001) - suggests that market uncertainty as reflected by geographical unfamiliarity has a role in triggering reference point anchoring
• Diaz Gallimore & Levy (2004) - while valuers perhaps ought to increase sales search in unfamiliar markets, this research revealed no evidence that they do so
Methodology
Study One: Novices• 181 participants drawn
from students completing a Bachelor of Property Degree at the University of Auckland, New Zealand
• All students had completed 1-17 property courses
• All students had at least 6 hours practical experience
• Experiment was carried out under the supervision of 5 researchers at lecture theatres to ensure minimum distraction and bias
Samples
Study Two: Experts• 46 participants who were
registered valuers
• The respondents were employees from seven companies in the Auckland area
• Experiment was carried out under the supervision of 2 researchers inside a room at the company premises to ensure minimum distraction and bias
Data Collection
• All respondents were asked to read a fictitious news article reporting on the reporting of “a prestigious consortium of economic forecasters”
• Each treatment group was provided with a description of the Auckland (high familiarity) or Atlanta (low familiarity) market framed either positively or negatively and were instructed to answer a number of questions relating to their perceptions of the market
Examples of Positive and Negative Framing
Positive Framing Negative Framing
HeadingGood news for Auckland [Atlanta]: prestigious forecasting group anticipates recovery is only one year out.
HeadingBad news for Auckland [Atlanta]: prestigious forecasting group anticipates recovery at least one year out.
IntroductionA prestigious consortium of economic forecasters with their fingers on the pulse of the global economy sees good times just ahead for New Zealand’s [the US’s] number one commercial property market.
IntroductionA prestigious consortium of economic forecasters with their fingers on the pulse of the global economy sees a prolonged recovery for New Zealand’s [the US’s] number one commercial property market.
Within textA majority of EFC’s forecasters anticipate that the Auckland [Atlanta] commercial property market will stabilise in as little as a year.
Within textA majority of EFC’s forecasters anticipate that the Auckland [Atlanta] commercial property market will not stabilise for another full year.
The independent variables that were manipulated in this experiment were:1. Market Familiarity – familiar property market (Auckland) or
unfamiliar market (Atlanta) 2. Message Framing – positive or negative
A 2 x 2 between subjects design was implemented to investigate differences between treatment groups
Experimental Design
Sample Sizes
Novices (Students)Market Familiarity
TotalFamiliar (Auckland)
Unfamiliar (Atlanta)
FramingPositive 36 50 86
Negative 46 49 95
Total 82 99 181
Experts (Valuers)Market Familiarity
TotalFamiliar (Auckland)
Unfamiliar (Atlanta)
FramingPositive 11 11 22
Negative 12 12 24
Total 23 23 46
Outcome MeasuresThe impact of Framing and Market Familiarity on a number of dependent (outcome) variables was investigated, these being:
Outcome Measure
Positive Outcome Measures
Positive Feelings
Buyer Optimism
Perceptions of an Expected Rebound in the Commercial Property Market
Negative Outcome Measures
Perceptions of Greater Volatility in the Commercial Property Market
Buyer Pessimism
Belief that there is a Declining Commercial Property Market
Analysis and Results
Study One: Novices• A 2 (Familiarity – Unfamiliar/
Familiar) x 2 (Framing – Negative/ Positive) between subjects design
• Analysis of Variance (ANOVA) used to investigate the impact of the Framing and Market Familiarity
• A separate ANOVA was conducted for each of the dependent variables
Analysis
Study Two: Experts• Small sample sizes in each
group meant non-parametric tests were required
• To investigate differences between positive and negative framing groups• Mann-Whitney U tests
• To investigate differences for both framing and market familiarity:• Kruskal Wallis tests• Graphical exploration /
descriptive statistics
• Separate analyses for each of the dependent variables
Hypotheses
• Hypotheses were formulated for each dependent variable
• For each dependent variable, hypotheses were formulated for the main effect of framing on the dependent variable AND the interaction effect between framing and expertise
• The hypothesis being that the impact of message framing is moderated by level of expertise
Positive Outcome Measures: Positive Feelings
Novices Experts
H2: The impact of framing on positive feelings in the short term will be moderated by market familiarity
H1: Negative (positive) framing of the same information will decrease (increase) positive feelings in the short term in the relevant commercial property market
+ve +ve
-ve-ve
Positive Outcome Measures: Positive Feelings
H2: The impact of framing on positive feelings in the short term will be moderated by market familiarity
H1: Negative (positive) framing of the same information will decrease (increase) positive feelings in the short term in the relevant commercial property market
Novices Experts
Positive Outcome Measures: Positive Feelings
H2: The impact of framing on positive feelings in the short term will be moderated by market familiarity
H1: Negative (positive) framing of the same information will decrease (increase) positive feelings in the short term in the relevant commercial property market
H1: Supported at 5% LevelH2: Supported at 5% Level
H1: Not Supported at 5% LevelH2: Not Supported at 5% Level
Novices Experts
Positive Outcome Measures: Buyer Optimism
H4: The impact of framing on buyer optimism will be moderated by market familiarity
H3: Negative (positive) framing of the same information will decrease (increase) buyer optimism in the relevant commercial property market
+ve +ve
-ve-ve
Novices Experts
Positive Outcome Measures: Buyer Optimism
H4: The impact of framing on buyer optimism will be moderated by market familiarity
H3: Negative (positive) framing of the same information will decrease (increase) buyer optimism in the relevant commercial property market
Novices Experts
Positive Outcome Measures: Buyer Optimism
H4: The impact of framing on buyer optimism will be moderated by market familiarity
H3: Negative (positive) framing of the same information will decrease (increase) buyer optimism in the relevant commercial property market
H3: Supported at 5% LevelH4: Supported at 5% Level
H3: Not Supported at 5% LevelH4: Not Supported at 5% Level
Novices Experts
Positive Outcome Measures: Perceptions of an Expected Rebound
H6: The impact of framing on perceptions of an expected rebound will be moderated by market familiarity
H5: Negative (positive) framing of the same information will decrease (increase) perceptions of an expected rebound in the relevant commercial property market
+ve
+ve-ve-ve
Novices Experts
Positive Outcome Measures: Perceptions of an Expected Rebound
H6: The impact of framing on perceptions of an expected rebound will be moderated by market familiarity
H5: Negative (positive) framing of the same information will decrease (increase) perceptions of an expected rebound in the relevant commercial property market
Novices Experts
Positive Outcome Measures: Perceptions of an Expected Rebound
H6: The impact of framing on perceptions of an expected rebound will be moderated by market familiarity
H5: Negative (positive) framing of the same information will decrease (increase) perceptions of an expected rebound in the relevant commercial property market
H5: Supported at 5% LevelH6: Not Supported at 5% Level
H5: Not Supported at 5% LevelH6: Not Supported at 5% Level
Novices Experts
Negative Outcome Measures: Buyer Pessimism
H8: The impact of framing on buyer pessimism will be moderated by market familiarity
H7: Negative (positive) framing of the same information will increase (decrease) buyer pessimism in the relevant commercial property market
+ve+ve-ve
-ve
Novices Experts
Negative Outcome Measures: Buyer Pessimism
H8: The impact of framing on buyer pessimism will be moderated by market familiarity
H7: Negative (positive) framing of the same information will increase (decrease) buyer pessimism in the relevant commercial property market
Novices Experts
Negative Outcome Measures: Buyer Pessimism
H8: The impact of framing on buyer pessimism will be moderated by market familiarity
H7: Negative (positive) framing of the same information will increase (decrease) buyer pessimism in the relevant commercial property market
H7: Not Supported at 5% LevelH8: Not Supported at 5% Level
H7: Not Supported at 5% LevelH8: Not Supported at 5% Level
Novices Experts
Negative Outcome Measures: Perceptions of a Declining Market
H10: The impact of framing on perceptions of a declining commercial property market will be moderated by market familiarity
H9: Negative (positive) framing of the same information will increase (decrease) perceptions that there is potential for a declining commercial property market
+ve
+ve-ve
-ve
Novices Experts
Negative Outcome Measures: Perceptions of a Declining Market
H10: The impact of framing on perceptions of a declining commercial property market will be moderated by market familiarity
H9: Negative (positive) framing of the same information will increase (decrease) perceptions that there is potential for a declining commercial property market
Novices Experts
Negative Outcome Measures: Perceptions of a Declining Market
H10: The impact of framing on perceptions of a declining commercial property market will be moderated by market familiarity
H9: Negative (positive) framing of the same information will increase (decrease) perceptions that there is potential for a declining commercial property market
H9: Supported at 10% LevelH10: Not Supported at 5% Level
H9: Not Supported at 5% LevelH10: Not Supported at 5% Level
Novices Experts
Negative Outcome Measures: Perceptions of Greater Volatility
H12: The impact of framing on perceptions of greater volatility will be moderated by market familiarity
H11: Negative (positive) framing of the same information will increase (decrease) perceptions of greater volatility in the relevant commercial property market
+ve
+ve
-ve
-ve
Novices Experts
Negative Outcome Measures: Perceptions of Greater Volatility
H12: The impact of framing on perceptions of greater volatility will be moderated by market familiarity
H11: Negative (positive) framing of the same information will increase (decrease) perceptions of greater volatility in the relevant commercial property market
Novices Experts
Negative Outcome Measures: Perceptions of Greater Volatility
H12: The impact of framing on perceptions of greater volatility will be moderated by market familiarity
H11: Negative (positive) framing of the same information will increase (decrease) perceptions of greater volatility in the relevant commercial property market
H11: Supported at 5% LevelH12: Supported at 5% Level
H11: Not Supported at 5% LevelH12: Not Supported at 5% Level
Novices Experts
Summary
Summary: Main Effects (Framing)
Outcome Variable
Students[Positive – Negative]
Valuers[Positive – Negative]
Sample Mean
DifferenceSig.
Sample Mean
DifferenceSig.
Positive Outcomes
H1 Positive feelings +0.8 ** +0.4
H3 Buyer optimism +0.8 ** +0.4
H5 Expected rebound +0.6 ** +0.4
Negative Outcomes
H7 Buyer pessimism -0.1 -0.1
H9 Declining market -0.4 * -0.3
H11 Greater volatility -0.4 ** -0.4
Summary: Interaction Effects (Framing and Market Familiarity)
Outcome VariableStudents
[Positive – Negative]
Valuers[Positive – Negative]
Sample Mean
DifferenceSig.
Sample Mean Difference
Sig.
Positive Outcomes
H2
Familiar: Positive feelings 0.3 +0.6 Unfamiliar: Positive feelings 1.3 ** +0.2
H4
Familiar: Buyer optimism 0.2 +0.9 Unfamiliar: Buyer optimism 1.1 ** -0.1
H6
Familiar: Expected rebound 0.5 +0.3 Unfamiliar: Expected rebound 0.6 +0.5
Negative Outcomes
H8
Familiar: Buyer pessimism -0.3 -0.3 Unfamiliar: Buyer pessimism -0.1 +0.1
H10
Familiar: Declining market -0.4 -0.7 Unfamiliar: Declining market -0.3 +0.1
H12
Familiar: Greater volatility -0.5 * -0.3 Unfamiliar: Greater volatility -1.3 ** -0.6
Summary
• With regard to message framing …– Experts (Valuers) appear to use heuristics more in
unfamiliar markets– Novices (Students) tend to use heuristics more in
familiar markets
• Why???
Questions