Ruokolainen, A and Plat, H T (1998) A system for allocating of private home owners' annual budget to housing. Journal of Financial Management of Property and Construction, 3(3), pp. 37-48. ISSN 1366-4387
Abstract
Private home owners base their decision making on the investment expenditure and/or the annual financing costs of the choice alternatives. Future costs due to operating, maintenance and disposal activities are often ignored and benefits expected to be gained from the alternatives are not systematically measured. The purpose of this paper is to suggest a decision support system which provides proper information about the benefits and financial consequences of the alternatives assisting future private home owners' decision making. The benefits are revealed as willingness to pay for the choice alternatives using the bidding game of the contingent valuation method. The financial consequences of the alternatives are presented as annual costs so that the costs can be compared with a household budget expressed on an annual basis. The decision support system has been tested by a small case study carried out in Tampere Area, Finland. The results of the case study emphasise the importance of the annual cost calculation and utility measurement for the choice alternatives although some improvements in the system are still needed to be made.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | annual cost, building performance, decision support system, private home owner, utility measurement |
| Index terms: | Finland, owner, case study, household, building performance, decision support, willingness to pay, housing, valuation method, bidding, financing, decision-making |
| Subjects: | Geography, demography, quality assurance, construction type, bidding, economic analysis, sociology, decision analysis, price determination, data collection methods, real estate economics |
| Topics: | Quality Management, Risk Management, Procurement, Geographical Context, Urban Studies, Stakeholder Management, Construction Technology, Business Strategy, Research Practice |
| Descriptive scope: | 3 PCE |
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