THE DIRECT COMPARISON METHOD OF VALUATION AND STATISTICAL VARIABILITY

Abstract

The problem of obtaining suitable comparables has been recognised as the principal weakness in the direct comparison method of valuation. This paper utilising a data‐base derived for Northern Ireland highlights the degree of statistical variability that exists in residential property values. It is shown that knowledge of variability can aid the valuer in looking wider for comparables in certain property types while also bringing attention to situations in which spurious comparables are statistically more probable. In conclusion the case is forwarded for a ‘pooled’ data base in which the level of information available for the valuer could be greatly enhanced.

Citation

ADAIR, A. and McGREAL, S. (1987), "THE DIRECT COMPARISON METHOD OF VALUATION AND STATISTICAL VARIABILITY", Journal of Valuation, Vol. 5 No. 1, pp. 41-48. https://doi.org/10.1108/eb008005