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Heuristic-driven bias in property investment decision-making in South Africa

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dc.contributor.authorLowies, G.A.
dc.contributor.authorHall, J.H.
dc.contributor.authorCloete, C.E.
dc.date.issued2016
dc.description.abstractThe purpose of this paper is to determine whether anchoring and adjustment as heuristic-driven bias and herding behaviour influences listed property fund managers in South Africa’s property investment decisions. The study contributes to the understanding of the influence of heuristic-driven bias and herding behaviour on property investment decisions made in a highly volatile environment. This study is focused on the subject field of behavioural finance and follows a survey-based design. A questionnaire was finalised after completion of the pilot study and was sent via e-mail to fund managers of all South African-based property funds listed on the Johannesburg Securities Exchange. Non-parametric statistical measures were used. Consistency with other studies suggests that anchoring and adjustment may exist in the decisions made by listed property fund managers. However, fund managers tend to not adjust to new information due to the current socio-political environment in South Africa rather than a lack of understanding of the new information. It is recommended that investors form developed and emerging economies take notice of the highly volatile circumstances in which property fund managers in an emerging economy such as South Africa have to make investment decisions. The probability of missed gains as a result of conservative investment strategies may have an impact on future returns. This study enhanced the understanding of the role that heuristic-driven bias plays in the South African property industry and more importantly, it went some way towards enhancing understanding of behavioural aspects and their influence on property investment decision making in an emerging market
dc.identifier.citationJournal of Property Investment and Finance, 2016; 34(1):51-67
dc.identifier.doi10.1108/JPIF-08-2014-0055
dc.identifier.issn1463-578X
dc.identifier.issn1470-2002
dc.identifier.urihttps://hdl.handle.net/11541.2/117573
dc.language.isoen
dc.publisherEmerald Group Publishing
dc.rightsCopyright 2016 Emerald Group Publishing
dc.source.urihttps://doi.org/10.1108/JPIF-08-2014-0055
dc.subjectbehavioural finance
dc.subjectemerging markets
dc.subjectherding behaviour
dc.subjectanchoring and adjustment
dc.subjectheuristic-driven bias
dc.subjectproperty fund managers
dc.titleHeuristic-driven bias in property investment decision-making in South Africa
dc.typeJournal article
pubs.publication-statusPublished
ror.mmsid9916016908201831

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