Survey research is a useful tool that can help researchers gain a better understanding of a given topic. It has proven to be a truly versatile instrument that’s practical in almost any field of research. One of the unique aspects of surveys is their ability to acquire a substantial amount of information in a short time over a diverse range of topics. Surveys can range from very informal to extremely detailed and take on a number of formats. Of course, all of those details really just depend on what kind of information you’re trying to collect.
In our work, we commonly turn to survey research when we want to better understand how buyers perceive a market under certain conditions and whether those perceptions affect the amount a consumer is willing to pay for a property. This is especially important in situations where market failure is suspected or where market data are not available.
Imagine that you are planning to purchase a home. When you sit down and begin reading the disclosure statement, you find that the soil on the property contains excessive contamination. You realize that by purchasing the property you will not be able to eat the vegetables you grow in your garden and your children will not be able to dig around in your backyard, to name a few of the constraints the contamination may impose on your day-to-day life. Your opinion about this property, how you will be able to use it, and how much you will be willing to pay for it have probably all just dramatically changed within a matter of seconds.
When a property has been contaminated, it is often difficult for sellers to find buyers who are willing to purchase their property. If they do find a buyer, it is not uncommon for that buyer to offer a bid price that is significantly lower than that home’s pre-contamination market value. When there is limited information regarding arm’s-length transactions, determining those properties’ post-contamination market value through the three main approaches to valuation becomes impractical. By using a contingent valuation survey, respondents are able to state their preferences in a hypothetical market scenario that is carefully designed to mimic the real market.
When surveys are cautiously administered and designed, adhering to stringent guidelines, values derived from these opinions can provide accurate measurements of property value and whether there are any losses or not. Further, in addition to providing accurate loss estimates, survey data allow us to learn not only whether buyers are demanding a discount in a market, but also why. Although the contingent valuation survey method proves to be particularly helpful in situations where market failure is suspected or where market data are not available, the qualitative data derived from the surveys provide researchers with deeper insight into potential homebuyers’ true perceptions of the market and how those perceptions influence value estimates and the market.
– Abigail Mooney