Market potential for smart growth neighbourhoods in the USA: A latent class analysis on heterogeneous preference and choice

With data from a 2011 National Association of Realtors community preference survey, we examined individuals’ preferences and the resulting market potential for smart growth neighbourhoods in the USA. Using a latent class choice model, we discovered four classes of individuals that reveal distinctive behaviours when choosing smart growth neighbourhoods, based on the interplay between aspects of community design, socioeconomic characteristics and personal attitudes. Based on these results we estimated the demand for smart growth neighbourhoods given the way they are planned and built. By linking the results of the latent class choice to a market diffusion model we were able to evaluate the effectiveness of a proposed smart growth neighbourhood design in inducing less sprawling development.

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