CONSUMER PURCHASE DECISIONS FOR AFFORDABLE HOUSING IN SOUTHERN VIETNAM philippines in partial fulfillment of the requirements for the degree doctor of philosophy in management

CONSUMER PURCHASE DECISIONS FOR AFFORDABLE HOUSING IN SOUTHERN VIETNAM A proposal dissertation presented to The Faculty of the Graduate School Ifugao State University Lamut, Ifugao, Philippines in Partial Fulfillment Of the Requirements for the Degree Doctor of Philosophy in Management By LE DAI NGHIA December 2017 Republic of the Philippines IFUGAO STATE UNIVERSITY Nayon, Lamut, Ifugao APPROVAL SHEET This Dissertation Proposal CONSUMER PURCHASE DECISIONS FOR AFFORDABLE HOUSING IN NORTHERN VIETNAM Prepared and submitted by LE DAI NGHIA is hereby recommended for approval and acceptance as a requirement for the degree DOCTOR OF PHILOSOPHY IN MANAGEMENT Dr Pham Quoc Luyen, Adviser PANEL OF EXMAMINERS Accepted and Approved by the Advisory Committee on _ Member Member Member Member _ Dean/Coordinator, Graduate School ii ABSTRACT Title: Consumer Purchase Decisions for Affordable Housing in Southern Vietnam Researcher: LE DAI NGHIA This study presents a research of factors affecting on consumer purchase decision for an affordable house in the South of Vietnam by using methods of descriptive statistics, Exploratory Factor Analysis (EFA), and Multiple Regression There were 413 complete questionnaires, with the ratio at 82.6%, among 500 survey questionnaires were collected This primary data was then tested Cronbach’s Alpha for scales, executed Exploratory Factor Analysis (EFA), adjusted the Hypotheses, and Regression Analysis The final results of multiple regression showed that five factors strongly affecting the dependent variable “Purchase Decision” including Finance, Environment, Physical, Marketing, and Legal factors with beta values respectively as 0.178, 0.226, 0.284, 0.133, and 0.109 Keywords: Affordable housing market, Purchase Decisions for Affordable House, Consumer Purchase Decisions for Affordable House iii ACKNOWLEDGEMENTS I am genuinely grateful to my dissertation committee and also to my supervisor who patience and wisdom guided me every step of this journey I also want to acknowledge the faculty and staff at Ifugao State University for their encouragement and professionalism Once again, thank you! iv DEDICATION I am also grateful to my family Their love and supports that me to continue and achieve my education goals Thank you to my mom and dad, who have always stressed the importance of an education and have supported me during my time of joining PhD program v CONTENTS ABSTRACT iii ACKNOWLEDGMENTS iv DEDICATION v Chapter 1.1 1.2 1.3 1.4 1.5 INTRODUCTION Background of the study Conceptual framework 60 Paradigm of the Study 61 Statement of the Problem 62 Hypotheses 63 Chapter 2.1 2.2 2.3 2.4 2.5 2.6 METHODOLOGY 65 Research design 65 Research Environment 66 Respondents 69 Data gathering procedures 72 Data Gathering Tools 72 Statistical Treatment 74 Chapter 3.1 3.2 3.3 3.4 3.5 RESULTS AND DISCUSSIONS 79 Descriptive analysis 79 Test reliability of the scales (Cronbach’s Alpha) 84 Exploratory Factor Analysis (EFA) 85 Adjusting study hypotheses after factor analysis 92 Regression Analysis 93 Chapter CONCLUSION AND RECOMMENDATIONS 111 4.1 Summary of the study results 111 Testing hypotheses of model 113 Implications for policy and practice 115 4.2 Recommend for the residential housing industry 115 4.2.1 Recommend for the residential afordable home buyer 115 4.2.2 Recommend for government 116 4.2.3 Recommend for further study 117 REFERENCES 119 APPENDICES 135 APPENDIX A 135 APPENDIX B 139 APPENDIX C 145 APPENDIX D 157 vi LIST OF TABLES Table 1.1 Average Savings Capacity by Household Income Quintiles, 2014 (thousand, VND) Table 2.1 Sample sizes for different sizes of the population at ………… 95 confidence level 71 Table 2.2 Distribution of respondents 72 Table 2.3 The measure and layout of the questionnaire 74 Table 3.1 Age 80 Table 3.2 Gender 81 Table 3.3 Marital Status 82 Table 3.4 Education Attainment 83 Table 3.5 Monthly Income 83 Table 3.6 House Ownership 84 Table 3.7 Results of testing Cronbach’s Alpha coefficient (Appendix A) 85 Table 3.8 Statistics of scale and observed variables before analyzing EFA 85 Table 3.9 Rotated Component Matrixa (Appendix B) 86 Table 3.10 KMO and Bartlett's Test 87 Table 3.11 Total Variance Explained 87 Table 3.12 Results of testing Cronbach’s Alpha coefficient (Appendix A) 88 Table 3.13 Correlations 94 Table 3.14 Coefficientsa 96 Table 3.15 Model Summaryb 96 Table 3.16v ANOVAa 97 Table 3.17 Summary of regression analysis 110 vii LIST OF FIGURES Figure 1-1 Conceptual Framework 61 Figure 1-2 Paradigm of the Study 61 Figure 2-1 Map of Provinces in Southern of Viet Nam 69 Figure 3-1 Adjusted Model 93 viii Chapter INTRODUCTION Housing is extremely important to all people Housing has significant influenced on all aspect of human life from basic need to quality of life, health, welfare as well as productivity of man Thus, a house is considered as the largest single asset owned by most households, and a house is a high involvement product for residents (Zeng, 2013) In spite of this widely acknowledged the importance of acquiring an appropriate house is strongly emphasised in many societies, a large proportion of urban residents in less developed countries not have access to decent housing at affordable cost (Ibem, 2011) Hence, inadequate housing condition has become an intractable challenge that has continued to receive attention from governments and individuals in many developing countries There was a study done by World Bank (2015) found out since Doi Moi, the country has experienced impressive economic growth, averaged at 7.4 percent per annum from 1990 to 2008, lowering to an average of percent per annum from 2007 to 2013 Strong economic growth has supported a substantial reduction in poverty, from 58 percent in 1993 to 17 percent in 2012 Vietnam is recognized as a country with the second fastest growth rate among the countries in East Asia and the fastest in Southeast Asia (Luu, Kim, Truong & Ogunlana, 2009) Membership of the World Trade Organization (WTO) has helped Vietnam become prominent on the world investment map The growth was fuelled not just by the textile industry, which the country is so known for, but also the IT, tourism, automotive, medical devices and high-technology manufacturing for global brands such as Samsung, LG Electronics, and Intel (Chan, 2016) Experts are expecting the Vietnamese economy to continue its 7% growth path for several more years to come Yet, Vietnam has remained largely rural, with more than half of its population working in the agricultural sector, which only contributed 17 percent of GDP in 2014 (World Bank, 2015) Not only has the economic growth outpaced that of other low-income nations in the region, but also Vietnam has been perceived as a successful model for poverty alleviation (Linh & Thao, 2011) Urbanization has been used as a tool to accelerate economic growth and poverty reduction (World Bank, 2015) Increasing migration reflects not only economic growth but also important regional socioeconomic disparities, particularly between the cities and the countryside, and the growing labour market in large cities and the expanding industrial zones Over the last 20 years’ the household size in Vietnam has dropped from 4.7 in 1995 to 3.6 in 2014 Rural-urban migration increased from 20% to 34% in the same period, while agriculture as a proportion of total GDP continues to fall (Chan, J 2016,October) Unlike locals who purchase housing with the fastest-growing middle class across Southeast Asia and that is expected to triple again from 12 million in 2012 to 33 million in 2020, fuelling the growing consumer market (Jennings, 2016) • Marital Status 147 148 • Education Attainment 149 150 151 • Monthly Income 152 153 154 • House Own 155 156 APPENDIX D (QUESTIONNAIRES) Dear Sir/Madam, I am a student at the Ifugao State University (IFSU) working on my Doctor of Philosophy in Management Degree I am conducting a research study on Consumer purchase decisions for affordable housing in Southern Vietnam I am very appreciative of your consideration to participate in this study Your participation in this research is extremely important Please complete the questionnaires attached to this letter These questionnaires are very short and will necessitate less than ten minutes of your time in All information provided by you will be kept confidential and your anonymity is guaranteed Your name and that of your employer will not be identified in the study’s data analyses or published reports You will be free to discontinue at any time if you feel threatened or uncomfortable Thank you in advance for your collaboration If you have any concerns or questions regarding the study, please not hesitate to contact me by e-mail at ldnghia82@gmail.com Sincerely yours, Le Dai Nghia Doctoral Candidate ❖ Part 1: Demographic information 157 1/ How old are you?  18-29 years old  30-39 years old  40-49 years old  50-59 years old  Over/Upper 59 2/ Please answer the following questions:  Female  Male 3/ How is your marital status?  Single/Alone  Married  Separated  Relict 4/ What is your educational attainment?  High-School  College  University  Master  Others 5/ What is your household’s income level per month?  Lower Million Vietnam Dong (Mio VND)  5-7 Mio VND  8-10 Mio VND  11-13 Mio VND 158  Upper/Over 13 Mio VND 6/ Do you own a house?  Yes (have a house)  No (do not have a house) ❖ Part 2: Asset factors affecting consumer buying behaviour How important to you are the following aspects of buying decision in affordable housing? Please stick to the available boxes in each question with the meaning as follows: ✓ Level 1: Strongly disagree; ✓ Level 2: Disagree; ✓ Level 3: Neutral (Neither disagree nor agree); ✓ Level 4: Agree; ✓ Level 5: Strongly agree No Content Physical housing Exterior of housing Interior of housing Construction Type of house Size of the house Location Convenience to workplace 159 Convenience to school Convenience to public transportation, market, entertainment, Convenience to the main traffic Size of street Environment General security place Neighbourhood Pollution and noise View of the house Fengshui of the house (direction) Finance Price Income Ability to pay a monthly payment Interests Maximum mortgage Marketing Investor’s brand image Mass advertising Staff’s selling skill Legal 160 Procedures process of selling the affordable house The purchase contract is clearly Investor’s commitment Purchase Decision I have the plan to buy a house I make effort to buy a house I make the decision to buy a house for my family 161 ... purely in terms of what households in different income ranges can afford and housing is provided by the market within that price range irrespective of the quality of housing Affordable housing is the. .. (2011) found that in Vietnam, the lack of space plays the most important role in the young households’ housing decisions, either in the form of housing 21 needs arising after weddings, when a child... mentioned that the middle-income group who is not eligible for the current affordable housing program in Vietnam and cannot afford the market rate housing The truth is that the middle-income group