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Nonlinear Effects in Easement Valuation

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Abstract

Rules of thumb have been developed to assist appraisers in dealing with the uncertainties that abound when easement values must be estimated. An economic analysis of one popular rule-of-thumb technique, based on a fixed percentage of the value of a hypothetical fee simple interest in the affected land, reveals that such methodology could not generally be expected to yield meaningful results. If a rule of thumb were to be employed, its use would be more supportable if the underlying assumptions reflected the nonlinear structure of land values.

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  • Henry J. Munneke & Joseph W. Trefzger, 1998. "Nonlinear Effects in Easement Valuation," Journal of Real Estate Research, American Real Estate Society, vol. 16(2), pages 219-228.
    • Handle: RePEc:jre:issued:v:16:n:2:1998:p:219-228
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    1. Peter F. Colwell & C. F. Sirmans, 1978. "Area, Time, Centrality and the Value of Urban Land," Land Economics, University of Wisconsin Press, vol. 54(4), pages 514-519.
    2. Colwell, Peter F. & Munneke, Henry J., 1997. "The Structure of Urban Land Prices," Journal of Urban Economics, Elsevier, vol. 41(3), pages 321-336, May.
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    Cited by:

    1. Jeffrey Stokes, 2012. "The value of the option to preserve farm real estate," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 36(1), pages 162-175, January.

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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