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Determinants of Variance in Cost Method of Valuation in Uyo, Nigeria

Author

Listed:
  • Anih Paul C.

    (Department of Estate Management University of Uyo in Nigeria)

  • Usenemana Sunday

    (Department of Estate Management, University of Uyo in Nigeria)

Abstract

Variance in the cost method of valuation as caused by certain variables is objectionable in the profession of estate surveying and valuation at both local and international best practices. The study aimed at determining the variables for the variance in the application of the cost method of valuation for estate surveying and valuation practice in Uyo. The sample of the population used for the research comprised 110 estate surveyors in Uyo. The survey method was used for the research. The sampling technique was purposive sampling. The data were analyzed using standard deviation and analysis of variance (ANOVA). The findings showed that depreciation rates of σ2 =113.974 and σ = 10.676 were over 60% of the total variance of values among estate surveyors and valuers. The construction rates and errors in manual measurements and computation of areas, volumes and dimensions showed σ2 = 6.004 and σ = 2.4503, which accounted for 15% of total variance. The study recommends the use of a regional-based scientific approach to measure depreciation for consistency and high precision. Automated techniques, such as GPS, AutoCAD, Google Earth pro, are recommended to minimize variance in measurements.

Suggested Citation

  • Anih Paul C. & Usenemana Sunday, 2021. "Determinants of Variance in Cost Method of Valuation in Uyo, Nigeria," Real Estate Management and Valuation, Sciendo, vol. 29(3), pages 77-86, September.
    • Handle: RePEc:vrs:remava:v:29:y:2021:i:3:p:77-86:n:1
    DOI: 10.2478/remav-2021-0023
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    References listed on IDEAS

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    1. Oluseyi Joshua Adegoke, 2016. "Effects of valuation variance and inaccuracy on Nigerian commercial property market," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 34(3), pages 276-292, April.
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    More about this item

    Keywords

    analysis of variance; capital value; cost method; valuation; variance;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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