Location and neighbourhood conditions for housing choice and its rental value: Empirical examination in an urban area of North-East India

Abstract

Purpose

The purpose of the study is to understand the relative impacts of structural characteristics of house, its locational attributes and neighbourhood characteristics on the choice of house and the rent paid by the individual tenants. The micro level study helps in understanding the issues of urban housing and help in policy formulation.

Design/methodology/approach

This paper tried to identify the socio-economic, locational and neighbourhood factors that influence tenant households in determining their residential choices in an urban area of North-east India. Also, the extent of impacts of those characteristics on the monthly rent for housing is analysed. The analysis is based on the primary data collected from the sample residents of Dimapur Town in Nagaland. The sample units are selected by cluster sampling technique from all the wards. Regression technique is used under hedonic pricing technique to examine the impacts of various potential factors on the rent.

Findings

The analysis reveals that family size, income, education of the head of family, water availability, security, convenience to access workplace, road conditions, etc. have significant positive impacts on the monthly rent. However, the impacts of some locational and neighbourhood variables vary across social and economic groups.

Research limitations/implications

Time series data on the growth of house price are not available, so that the authors could examine the escalation of house price and rising scarcity of houses in the selected town.

Practical implications

Rental housing accounts for a significant percentage of housing in many urban centres. It is particularly important for the migrants and urban poor for whom it is the only source of accommodation. Location choice depending on capability, availability, requirement and neighbourhood conditions are integral parts of selection of accommodation in a city. Hence the present study has its relevant practical implications.

Social implications

Housing choice in a hilly urban area like Dimapur assumes a special significance for the presence of heterogeneous ethnic, social and cultural groups with majority of Tribal inhabitants with varied requirements and lifestyle.

Originality/value

No study on housing choice or pricing of residential accommodation has been done in North-East India. Here along with the socio-economic characteristics of the individuals, structural characteristics of house, neighbourhood and locational characteristics are used simultaneously to find out the impact of various factors on the total prices through hedonic pricing method.

Citation

De, U.K. and Vupru, V. (2020), "Location and neighbourhood conditions for housing choice and its rental value: Empirical examination in an urban area of North-East India", International Journal of Housing Markets and Analysis, Vol. 10 No. 4, pp. 519-538. https://doi.org/10.1108/IJHMA-10-2016-0072