Statistical Estimation Of Value Range A Methodological Contribution on Uncertainty Measurement in Property Valuation Section Articles

Abstract

This paper presents a statistical model of Value Range based on Triangular Distribution which adapts the concept of Control Limits in the Control Chart Theory. It is the purpose/aim of the paper to contribute on the methodological issue of Uncertainty which takes the probabilistic nature of uncertainty into account. 

Using market comparable data from two cases of commercial land valuation in East Jakarta and Tangerang County, the analytical results of the model suggests that Coefficient of Variation is a key aspect to consider whether the Value Range should be constructed at ± 1s or 2s. The sensitivity analysis indicates that the model works well with less data and data set with narrower variation is generally more favourable.

The practical value of the model is its potential use as a method for valuers to self-examine their valuation output. The model may as well be used as a method to complement fairness analysis, especially when there is a request for external review or even an appeal.