P- value Prob>Chi Squared
7.4 Main Findings from Multinomial Logit Model Results
One of the cardinal objectives of the thesis is to explain factors affecting the residential housing choice across different residential areas in Lagos State, Nigeria. This objective is well captured using multinomial logit model. The following results emanated from the estimated model:
First, most of the hypothesised signs are mixed for the housing price across different residential housing types and areas. It is normally expected theoretically that the signs would
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be negative; suggesting that at higher prices, quantity demanded of any product should be reduced. This is also expected to extend to an act of choice-making since it is an element of demand theory.
Given the value of odd ratios and z-statistics, housing price constitutes an important factor influencing residential housing choice in all the residential density areas. On the one hand, it has positive impact on the choice of flats and duplex and on the other hand, negative impact on the choice of a room in the main building and squatters‘ settlements relative to multi-household houses. For instance, in the high residential density area, the odds of a household head choosing flats increase by 2.629 times and decreases for a room in the main building and squatters‘ settlements by 0.709 and 0.810 times respectively, relative to multi-household houses. Similar arguments are true for low and medium residential density areas except for the fact that odds of a household head is not significant for choosing single-household house, flats and squatters‘ settlements in the low residential density area, while the odd ratios are significant for all the residential choices in the case of medium residential density areas though at different levels of significance. What can be inferred from the results is that household heads tend to react more to changes in the house prices in the medium residential density areas than in any other residential density area in Lagos State.
The impact of household income on the residential housing choice is also well- documented in the literature. The results depict that household head preferences for duplex, flats and a room in the main building increases relative to multi-household houses should there be an increase in household income and decreases for squatters‘ settlements. This outcome implies that higher condition of living is preferable to lower one as preferences often shifted in favour of flats and duplex relative to multi-household houses. This situation is particularly common among the affluent individual households in high and medium residential density areas. Preference for a room in the main building relative to multi-household houses is prevalent among the poor multi-household heads in the low residential density areas. Again, the signs are mixed thereby contradicting the positive expectation between household income and residential choice as indicated in the literature.
The size of household also determines, to a large extent the residential choice determination in our estimated results. Theoretically, the impact of a large family size on the housing demand is positive and it could also be positive for residential housing choice. From our results, the impact is mixed. For example, from the full sample size results, we observed that the odd of a household head choosing a flat in a block of flats increases by 1.082 times in relation to multi-household houses whereas it deceases for duplex by 0.572times in high
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residential density areas, whereas it increases by 1.355 times for duplex in low residential density area and increases for flats and duplex by 1.122 and 1.108 times respectively, in the medium residential density areas relative to multi-household houses. It should be mentioned here that this situation could be made possible if the head of household concerned has a good financial standing.
The gender dimension to the issue relating to residential housing choice determination suggests that it does not significantly matter as far as Lagos housing market is concerned. The gender-related dummy variables only appear significant in the case of a single-household house and a room in the main building for high residential density areas. The odds of a female headed household choosing a single-household house increase relative to male counterparts by 2.676 times and decreases for a room in the main building more than male by 0.676 times relative to multi-household houses. This, in effect, implies that female-headed household chooses to prefer a single-household house than the male counterpart relative to multi-household houses whereas they are less likely to choose a room in the main building than their male counterpart relative to the baseline category.
Age factor is another important determinant of residential housing choice with the degree of its impact varying from one age group to another. It was clearly depicted from the estimated results that the odds of a household head whose age bracket is 65 years and above choosing flats, duplex and squatters‘ settlements is more likely to increase than those within the age bracket 15 to 65 years by 4.233, 3.157 and 3.776 times, respectively relative to the reference group. This appears to be true for high residential density areas whereas in the case of the medium residential density areas different pictures emerged. For instance, the odds of an elderly (65years and above) choosing flats increase more than those within the age bracket 15-65 years by 5.362 times relative to multi-household houses, but decrease for squatters‘
settlements by 0.577 times more than age bracket 15-65 years in relation to the base category.
The odds only increase for squatters‘ settlements by 1.810 times in favour of 65years and above as against 15-65years relative to the baseline category in low density residential areas.
The importance of religion in residential choice determination is also recognised in the literature as people of the same faith prefer to stay and live together. Thus, our results offer additional evidence on this claim in the sense that people who practise other religions other than islam and christianity are more likely to choose a single-household house, flats and a room in the main building relative to multi-household houses. This is confirmed through the odd ratios which increase by 5.125, 3.851 and 1.451 times for the three residential housing choices in relation to the base category in the case of high residential density areas. None of
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the religious dummy variables appears to be significant for low residential housing choice. In the medium residential density areas, the odd of a muslim is less likely than a christian to choose duplex, by 0.553 times relative to multi-household house whereas, that of other religious groups are more likely to increase by 1.756 and 1.542 times for duplex and flats respectively. Taking a full sample size estimation results depict that the odd of muslims to choose flats and duplex decreases by 0.754 and 0.510 times than the christians relative to the baseline group, while the odds of other religious groups choosing flats, duplex and room increases by 2.200,3.714 and 1.654 times relative to multi-household houses.
Tribal-ethnic sentiments have been observed to also play a key role in determining the residential housing choice in the literature, but to what degree and extent is what the thesis tries to shed light on. The results from the estimated models show that the odds of an Ibo household choosing among the alternatives of residential houses like flats, a room in the main building and squatters‘ settlements are likely to increase across the residential areas as against the Yoruba‘s relative to multi-household houses. For example, in high residential density areas, the odds of an Ibo household increases more than the Yoruba‘s by 3.565, 2.870, 2.331 and 3.384 times relative to multi-household houses for a single-household house, flats, a room in the main building and squatters‘ settlements, respectively. Also, for low residential density areas, the odds for the Ibos to choose flats, a room in the main building and squatters‘settlement increase by 2.485, 2.409 and 10.949, whereas for medium residential density areas, the odds increase by 2.267, 3.898 and 2.738 times respectively than the Yoruba relative to the baseline category for same residential choices. In the case of low residential density areas, the odds ratio increases more substantially for squatters‘ settlements than any other residential choice. This simply shows that the Ibos are more likely to be found in squatters‘ settlements than people from other ethnic groups in relation to multi-household houses. This is quite common in the Lagos metropolis for the reason that has to do with the fact that majority of the people actually migrated to Lagos metropolis for business purposes.
They mostly prefer to build expensive houses in their home towns than Lagos, which they view as business centres where they come to make money and send back home.