The Effect of Behavioral Factors on Real Estate Investment Decision in Addis Ababa Ethiopia
| dc.contributor.advisor | Tesfa Nega (PhD) | |
| dc.contributor.author | Kassahun Workneh | |
| dc.date.accessioned | 2026-03-03T05:10:25Z | |
| dc.date.available | 2026-03-03T05:10:25Z | |
| dc.date.issued | 2025-09 | |
| dc.description.abstract | This study investigates how behavioral factors influence individual real estate investment decisions in Addis Ababa, Ethiopia. It focuses on three objectives: assessing heuristic based biases, examining prospect theory based biases, and evaluating the impact of herding behavior on individual real estate investors’ investment decision in Addis Ababa, Ethiopia. The study, grounded in behavioral finance theories, adopts a positivist philosophy and employs a quantitative approach with explanatory and descriptive research designs. Data were collected from 140 individual real estate investors using a structured Likert-scale questionnaire, validated through a pilot study and Cronbach’s Alpha. Using descriptive statistics and multiple regression analysis, the study examines nine behavioral biases: gambler’s fallacy, representativeness, availability, anchoring, overconfidence, mental accounting, regret aversion, loss aversion, and herding. Results show that gambler’s fallacy, availability, overconfidence, regret aversion, and herding negatively affect investment decisions, often resulting in suboptimal decision, while representativeness, anchoring, mental accounting, and loss aversion have a positive influence and are associated with more favorable investment outcomes. The findings underscore the significant role of behavioral biases in shaping real estate investment decisions, highlighting the need for investor awareness and informed policy interventions. It recommends that investors incorporate behavioral awareness into decision making and urges policymakers, especially the Ministry of Urban and Infrastructure Development, to design education programs that mitigate the impact of cognitive biases and reduce noise trading in Ethiopia’s real estate sector. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/7759 | |
| dc.language.iso | en_US | |
| dc.publisher | Addis Ababa University | |
| dc.subject | Behavioral Finance | |
| dc.subject | Real Estate Investment | |
| dc.subject | Heuristics | |
| dc.subject | Prospect Theory | |
| dc.subject | Herding Behavior | |
| dc.subject | Investment Decisions | |
| dc.subject | Addis Ababa | |
| dc.title | The Effect of Behavioral Factors on Real Estate Investment Decision in Addis Ababa Ethiopia | |
| dc.type | Thesis |