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Valuers' perceptions of depreciation models in DRC valuations

Author

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  • Olusegun Ogunba

Abstract

Purpose - The paper aims to address concerns that valuers' choice of depreciation models in their cost approach to value is not sustainable (is incapable of preserving patronage in present and future generations). Design/methodology/approach - The paper draws up conceptual expectations regarding how seven UK and US depreciation models pass or fail four identified sustainability indicators: reliability, consistency, usability and separate treatment of depreciation components. Valuation surveyors in Nigeria were offered as a case study of how valuers in one country respond to such conceptual investigations. Findings - The study found that cross‐sectional models, the breakdown model and hedonic modeling are the depreciation models perceived as most sustainable. However, popular model use follows easiest models rather than most sustainable models. Practical implications - The paper suggests that the pursuit of sustainability in valuation modeling should involve provision of institutionalized best practice guidance beyond that currently provided so as to assist valuers/appraisers in more sustainable choices. Originality/value - The paper is probably the first to address both UK and US depreciation models and to assess each using defined sustainability criteria.

Suggested Citation

  • Olusegun Ogunba, 2011. "Valuers' perceptions of depreciation models in DRC valuations," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 29(2), pages 190-209, March.
  • Handle: RePEc:eme:jpifpp:v:29:y:2011:i:2:p:190-209
    DOI: 10.1108/14635781111112792
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    Citations

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    Cited by:

    1. Aihie Vincent Uwaifiokun & Ikuabe Matthew, 2018. "Evaluation of Cost Estimation Techniques in Drc Valuation: A Comparative Assessment of Valuers and Quantity Surveyors in Lagos State," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 6(1), pages 175-192, November.
    2. Babatunde Isaiah Olajide, 2018. "Examining Heuristics for Building - Work-in-Progress Valuations in Niger State Nigeria," Real Estate Management and Valuation, Sciendo, vol. 26(2), pages 92-103, June.

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