Approaches to Improving Valuation Decision Making: A Review of the Literature

Abstract

Purpose – The complexity of property valuation, coupled with valuers’ cognitive limitations make some degree of error inevitable in valuations. However, given the crucial role that valuations play in the efficient functioning of the economy, there is need for continuous improvement in the reliability of reported values by enhancing the quality of the decision-making process. The purpose of this paper is to review previous research on valuation decision making, with particular interest in examining the approaches to improving the quality of valuation decisions and identifying potential areas for further research.

Design/methodology/approach – The paper adopts a narrative approach to review 42 research articles that were obtained from Scopus and Web of Science databases and through author citation searches.

Findings – Our findings show that existing literature is skewed towards examining the use of technology in the form of decision support systems with limited research attention on non-technological (i.e., behavioural) approaches to improving the quality of valuation decisions. We summarise the non-technological approaches and note that much of the discussions on these approaches often appear as recommendations arising from other studies rather than original investigations in their own rights.

Research implications – We conclude that studies investigating the effectiveness of the non-technological approaches to improving valuation decision making are lacking, providing various avenues for further research.

Originality/value – This paper presents the first attempt to provide a comprehensive overview of non-technological approaches to improving the quality of valuation decisions.