Multicultural examination of valuation behaviour
| Published date | 01 August 2004 |
| DOI | https://doi.org/10.1108/14635780410550894 |
| Date | 01 August 2004 |
| Pages | 339-346 |
| Author | Julian Diaz,Paul Gallimore,Deborah Levy |
| Subject Matter | Property management & built environment |
Multicultural examination of
valuation behaviour
Julian Diaz III
Georgia State University, Atlanta, Georgia, USA
Paul Gallimore
The Nottingham Trent University, Nottingham, UK
Deborah Levy
The University of Auckland, Auckland, New Zealand
Keywords Value analysis, Individual behaviour, United Kingdom, United States of America,
New Zealand
Abstract A series of experiments were conducted to examine valuation behaviour in the UK, the
USA, and New Zealand (NZ). Professional valuers from all three countries participated in the
study whose findings support the notion that the US normative model is cognitively demanding
and that greater departures from it result in reduced cognitive effort. The study also concluded
that subjects from cultures requiring disclosure (USA and NZ) examined a significantly greater
number of sales than did subjects from the UK where disclosure is uncommon. Finally, while
valuers perhaps ought to increase sales search in unfamiliar markets, this research revealed no
evidence that they do so. These findings are consistent with the need to seek cognitive efficiency and
reduce cognitive effort even at the expense of performance quality.
Introduction
Valuation behaviour has been the focus of an expanding literature recently reviewed in
Diaz (1999) and Hardin (1999). For example the processes actually followed by valuers,
as contrasted with those prescribed to them, have been investigated in Diaz (1990a).
Here evidence was developed that residential appraisers from the USA do not follow
prescribed (normative) processes. This finding was expanded in Diaz et al. (2000), who
concluded that the actual valuation processes of New Zealand (NZ), US and UK valuers
deviated from processes prescribed in the USA, but that NZ valuer processes were
more normative than US valuer processes, which were in turn more normative than
those of UK valuers. Further, the actual processes of NZ valuers did not vary
significantly from US valuer processes, but both varied significantly from the
processes actually employed by UK valuers.
Diaz (1990a) argued that normative processes are cognitively demanding and that
valuers depart from them in a subconscious search for efficiency. Compelled by
cognitive limitations characterising all humans, this search for efficiency is ubiquitous
in all human problem solving. Because increasing cognitive efficiency is associated
with decreasing time on task, an expectation is that the more normative (cognitively
demanding) a valuation process is, the greater the time on task. Finding evidence
supporting this expectation is one goal of this research.
The process of selecting comparable sales has been studied in Diaz (1990b),
Wolverton (1996), and Gallimore and Wolverton (1997). Diaz modelled the sales
selection processes of expert US residential appraisers and contrasted these processes
with those of novices. Wolverton discovered that knowledge of subject transaction
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.em eraldinsight.com/res earchregister www.em eraldinsight .com/1463-578X .htm
Valuation
behaviour
339
Received January 2002
Accepted December 2002
Journal of Property Investment &
Finance
Vol. 22 No. 4, 2004
pp. 339-346
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/14635780410550894
To continue reading
Request your trial