Investment decisions quality in the real estate sector

Abstract

Purpose – The study aims to establish the relationship between information search precision and investment decision quality in commercial real estate investment in Uganda and as a corollary, to establish the contribution of each of the dimensions of information search precision (perfect rationality, satisficing rationality and decision weights) to quality of real estate investment decisions, using evidence from Uganda.

Design/methodology/approach – This study was cross-sectional and correlational. It used a sample of 200 residential housing real estate investors, and the data were analyzed using SPSS Version 20 to test the hypotheses put forward.

Findings – Results indicate that information search precision and investment decision quality are significantly associated. Results further indicate that perfect rationality is the most important predictor investment decision quality.

Originality/value – This study improves our understanding of investment decision quality in a developing country setting unlike previous studies which evaluated investment decision quality exclusively based on standard finance using evidence from developed economies. Using evidence from Uganda, the current paper shows that perfect rationality in real estate investment decision-making is the more important in such settings.