Scientific basis of value and valuation

Özdilek, Ünsal

doi:10.1057/s41272-018-00169-z

Cited by 13 publications

(11 citation statements)

References 26 publications

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“…Economics and real estate appraisal are mainly concerned with value measure [56][57][58]. In North America, property valuation has been well-organized and improving for more than a century, benefiting from the works of classical economists [59][60][61][62][63][64] and contemporary authors [65][66][67]. Reliable estimates of property value are essential for a wide range of agents, including property owners and managers, investors, providers of public goods and services, constructors, buyers, sellers, and institutions [68][69][70].…”

Section: Classic Value Valuationmentioning

confidence: 99%

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Quantum Value Valuation Continuum

Özdilek

2024

Quantum Reports

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Price, cost, and income (PCI) methods are traditionally used to approximate the value state of an economic commodity such as a property. Based on the estimates of these methods, we explore how quantum theory represents the fundamental process of value valuation in practice. We propose that the mathematical formalism of quantum theory is a promising view and measure of economic value. To ground our exploration, we first map traditional PCI estimates onto three-dimensional spherical coordinates, which were then transformed into two-dimensional quantum states using the Bloch sphere. This step enabled the computation of eigenvalues and eigenvectors of the Hamiltonian matrix, from which the value state measures were derived. The results exhibit practical applications as well as fundamental insights into potential connections between economic and quantum value states.

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Section: Classic Value Valuationmentioning

confidence: 99%

“…We espouse the view that the complex nature of value is a result of its intangibility, more comprehensively understood as a dynamic and probabilistic "state" [67].…”

Section: Classic Value Valuationmentioning

confidence: 99%

Quantum Value Valuation Continuum

Özdilek

2024

Quantum Reports

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“…We conducted an empirical demonstration to show the applicability of the conceptual foundations of the entropy method in understanding the meaning of the value state and its connections to the EWM. To illustrate this, we considered the real estate appraisal system and data on a single-family property taken from estimations in [ 13 ]. The property was evaluated by Özdilek using conventional triadic SCA, CSA and ICA.…”

Section: An Empirical Demonstrationmentioning

confidence: 99%

The Role of Thermodynamic and Informational Entropy in Improving Real Estate Valuation Methods

Özdilek

2023

Entropy

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Price, Cost and Income (PCI) are distinct economic indicators intrinsically linked to the values they denote. These observables take center stage in the multi-criteria decision-making process that enables economic agents to convey subjective utilities of market-exchanged commodities objectively. The valuation of these commodities heavily relies on PCI-based empirical observables and their supported methodologies. This valuation measure’s accuracy is critical, as it influences subsequent decisions within the market chain. However, measurement errors often arise due to inherent uncertainties in the value state, impacting economic agents’ wealth, particularly when trading significant commodities such as real estate properties. This paper addresses this issue by incorporating entropy measurements into real estate valuation. This mathematical technique adjusts and integrates triadic PCI estimates, improving the final stage of appraisal systems where definitive value decisions are crucial. Employing entropy within the appraisal system can also aid market agents in devising informed production/trading strategies for optimal returns. The results from our practical demonstration indicate promising implications. The entropy’s integration with PCI estimates significantly improved the value measurement’s precision and reduced economic decision-making errors.

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“…This can be achieved by leveling the real estate market environment, suppressing subjective influences or eliminating errors that may have been unintentionally caused in preceding expert opinions due to insufficient research in the entire field. At this moment, the effect of the scientific basis behind the whole issue of real estate valuation is evident, which, in this respect, is a deterministic parameter of the final value of the valued real estate [1]. Usually, units of measure are used to determine the value of specific buildings putting their size in concrete terms.…”

Section: Literary Researchmentioning

confidence: 99%

Methodology for Calculating the Reproduction Value of Buildings

et al. 2021

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The article deals with the description of the methodology for calculating the reproduction value of buildings. It is a mathematical model that uses data obtained from a statistical survey and calculates the total reproduction value of buildings from a large data set. The model works with many variable inputs that describe the valued building. These include, for example, the use of the building, the enclosed space of the building, the floor area of the building, the building material of the supporting structures of the building, the age of the building, the technical condition of the building, the year the building was acquired and others. Based on the results, the model was calibrated and its parameters optimized to achieve the most accurate values.

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Scientific basis of value and valuation

Cited by 13 publications

References 26 publications

Quantum Value Valuation Continuum

Quantum Value Valuation Continuum

The Role of Thermodynamic and Informational Entropy in Improving Real Estate Valuation Methods

Methodology for Calculating the Reproduction Value of Buildings

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