impact of information technology on real estate licensee income, The

Journal of Real Estate Practice and Education, 2002 by Jud, G Donald, Winkler, Daniel T, Sirmans, G Stacy

The information technology variable (Tech is created by combining multiple variables in a factor analysis. The factor analysis has two distinct advantages. First, including many similar technology variables in a regression is likely to result in substantial collinearity, making interpretation of the coefficients difficult. A second benefit is the informational advantage of isolating the similar technology effect while reducing the noise associated with the disparate variables. Sirmans and Swicegood (2000) attempt to identify a technology effect with direct inclusion of the technology variables in a regression, but only one (use of computers) of seven variables is statistically significant at the 10% level. The use of factor analysis is designed to more effectively isolate the impact of technology on licensee income.

The variables combined for the factor analysis include the following: (1) Web, whether a firm has a web page; (2) Webp, whether the respondent has a personal website; (3) Weblist, whether the firm has web listings of properties; (4) Internet, hours of use per week of the Internet; (5) Email, percentage of clients contact using email; (6) Tech, number of different technologies used (for example, internet website, email address, digital camera, Palm pilot, etc.); (7) Soft, the number of software applications used; and (8) Cage, the age of the licensee's computer.4

Data and Empirical Results

Data Description

The data for this study are obtained from a survey of real estate licensees conducted by the authors for the Greensboro Regional Realtors Association. Greensboro is a medium-sized city in central North Carolina. It is the principal city in Guilford County, which had a total population of 421,048 in 2000. A survey of 983 real estate professionals was conducted during the summer of 2000. The survey questionnaire is shown in Appendix 1. The response rate was 29.7%, or 292 completed surveys. Of these, 276 were responses from brokers and salespersons. Missing, and incomplete, responses for the variables in this study resulted in a final sample of 149 observations.

The survey instrument, shown in Appendix 1, is divided into five parts as follows: (1) personal information; (2) real estate related activities; (3) professional designations; (4) firm characteristics; and (5) technology use.5

Summary statistics for the variables used in the regression analysis are shown in Exhibit 1. Approximately 64% of respondents have a broker's license, and thirtyseven are associated with a national franchise firm. The average workweek is 46.8 hours. The mean annual earnings of those in the sample is $63,449. Respondents have an average of 15.3 years of schooling. The average experience of respondents is almost 13.7 years and they have been with their current firm an average of 7.0 years. Sample respondents receive an average of 41% their income from buyer brokerage.

Factor Analysis

The factor analysis results indicate that the information technology variables have three common factors with eigenvalues exceeding 1.0, with a cumulative explained variation of 61.91%. The factor analysis results for the first factor, with the largest eigenvalue and explained proportion of the variance, are shown in Exhibit 2.6