Price, worth and value

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 1 February 2000

Citation

French, N. (2000), "Price, worth and value", Journal of Property Investment & Finance, Vol. 18 No. 1. https://doi.org/10.1108/jpif.2000.11218aaa.001

Publisher

:

Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited


Price, worth and value

Welcome to the second year of the Journal of Property Investment & Finance. In this issue, we bring you six academic papers on the theme of price, worth and value. The papers fall into two distinct categories; papers discussing the question of definition and standards and papers developing the underlying theory. All the papers have direct relevance to practice, and contribute to an area of debate that has been developing over the last five years.

The Journal of Property Investment & Finance, in its previous guise of the Journal of Property Valuation & Investment, has been at the forefront of the international debate concerning the concepts of value and worth. In the UK, the debate began with the publication of The Mallinson Report (RICS, 1994) which highlighted the distinction between a price definition (valuation) and an individual assessment on suitability of a property to a particular investor (calculation of worth). Baum et al. (1996), French (1996) and Peto et al. (1996) in Volume 14 of the journal discussed the issues raised by that report in full by papers. In the same year French and Byrne (1996) published a critique of the European definitions of value.

In Volume 15, Boydell and Gronow (1997) highlighted the way in which the Australian profession was addressing the issue. In the same volume, French (1997) and Peto (1997) developed the issues surrounding the concepts of price and worth and the implications they had on data analysis in valuations. It was in that year that we decided to put out a call for papers for a special issue on the subject. This culminated in the special issue that you now hold.

Hopefully, the papers included in this volume complement each other in content as well as providing a broad cross-section of views. The nature of the papers means that there is some overlap in the subject-matter, and indeed there is some discrepancy in the interpretation and emphasis placed on the definitions by the various authors. This is to be encouraged. Academic debate is an important part of the process. Past experience has shown that matters raised in the pages of this journal (and its sister journals) have influenced the guidance and information being promulgated by the professional bodies both in the UK and abroad. Witness the RICS Appraisal and Valuation Manual (RICS, 1996) and information papers on valuation methods (RICS, 1997a) and calculation of worth (RICS, 1997b).

All the papers included in this volume are taking the profession forward and to a lesser or greater extent will impact on the work of valuers and surveyors. We hope that this issue and the references contained within to previous work on the subject contribute to that debate.

Nick French

References

Baum, A.E., Crosby, N. and MacGregor, B. (1996), "Price formation, mispricing and investment analysis in the property market", Journal of Property Valuation & Investment, Vol. 14 No. 1, pp. 36-49.

Boydell, S. and Gronow, S. (1997), "The AIVLE discounted cash flow standard", Journal of Property Valuation & Investment, Vol. 15 No. 1, pp. 58-69.

French, N.S. (1996), "Investment valuation: developments from The Mallinson Report", Journal of Property Valuation & Investment, Vol. 14 No. 5, pp. 48-58 .

French, N. (1997), "Market information management for better valuations: concepts and definitions of price and worth", Journal of Property Valuation & Investment, Vol. 15 No. 5, pp. 403-10.

French, N.S. and Bowman, G. (1996), "Price and worth: developments in valuation methodology", Journal of Property Valuation & Investment, Vol. 14 No. 4, pp. 79-100.

French, N.S. and Byrne, P. (1996), "Concepts and models of value", in Adair, A., Downie, M.L., McGreal, S. and Vos, G. (Eds), European Valuation Practice: Theory and Technique, E. & F.N. Spon, London, pp. 15-29.

Peto, R., (1997), "Market information management for better valuations: data availability and application", Journal of Property Valuation & Investment, Vol. 15 No. 5, pp. 411-22.

Peto, R., French, N. and Bowman, G. (1996), "Price and worth: developments in valuation and methodology", Journal of Property Valuation & Investment, Vol. 14, pp. 79-100.

RICS (1994), The Mallinson Report: Commercial Property Valuations, Royal Institution of Chartered Surveyors, London.

RICS (1996), RICS Appraisal and Valuation Manual, Royal Institution of Chartered Surveyors, London.

RICS (1997a), Commercial Investment Property - Valuation Methods: An Information Paper, Royal Institution of Chartered Surveyors, London.

RICS (1997b), Calculation of Worth: An Information Paper, Royal Institution of Chartered Surveyors, London.