Coping with Technological Change: The Case of Retail
AbstractFunctional obsolescence in real estate occurs because of technological change. A theoretical model suggests that the early years of building life are characterized by functional obsolescence that is undiminished by reinvestment ("cures" in appraisal terminology). Later, observable functional obsolescence is eliminated by cures. A national, proprietary data set consisting of department store sales is utilized to test these propositions. The test is structured within a hedonic model in which the effect of age represents functional obsolescence and technological change, while other variables control for physical condition and location quality. The empirical results do not permit the rejection of the hypotheses developed from the theory. The measured rate of technological change in retail real estate is 1.7 percent per annum. Copyright 2003 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Journal of Real Estate Finance & Economics.
Volume (Year): 26 (2003)
Issue (Month): 1 (January)
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Web page: http://www.springerlink.com/link.asp?id=102945
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- John Corgel, 2007. "Technological Change as Reflected in Hotel Property Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 34(2), pages 257-279, February.
- Jonathan Wiley & Douglas Walker, 2011. "Casino Revenues and Retail Property Values: The Detroit Case," The Journal of Real Estate Finance and Economics, Springer, vol. 42(1), pages 99-114, January.
- Florenz Plassmann & T. Nicolaus Tideman, 2003. "A Framework for Assessing the Value of Downtown Land," Working Papers e07-5, Virginia Polytechnic Institute and State University, Department of Economics.
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