Neoclassical economics and new institutional economics: An assessment of their methodological implication for property market analysis

Abstract

Purpose

The purpose of this paper is to examine the provisions of both the neoclassical economics and new institutional economics theses and assesses the implications of their methodologies for property market analysis.

Design/methodology/approach

This research is based on secondary literature review and desk-based study.

Findings

It is argued that new institutional economics, grounded on firmer foundations of human behaviour, offers an analytical approach to the study of the property market which emphasizes the institutionally contingent nature of real estate exchange, thus placing real estate within its socio-economic context.

Originality/value

In-depth examination and juxtaposition of the provisions, assumptions, philosophical orientations and limitations of these main traditions of economic thought towards the achievement of a representative study of the workings of the property market.

Citation

Agboola, A.O. (2015), "Neoclassical economics and new institutional economics: An assessment of their methodological implication for property market analysis", Property Management, Vol. 33 No. 5, pp. 412-429. https://doi.org/10.1108/PM-12-2014-0055