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The Evolution of Analytical Hierarchy Process (AHP) as a Decision Making Tool in Property Sectors

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  • Mohd Safian, Edie Ezwan
  • Nawawi, Abdul Hadi

Abstract

In the 1970s, Analytical Hierarchy Process (AHP)has been introduced accidentally by Saaty [4] as a tool to allocate resources and planning needs for the military. However, due to its ability to identify the weightage of variables efficiently in research, it has become popular in many sectors. Basically, AHP is a tool in decision making that arranges the variables into a hierarchical form in order to rank the importance of each variable. Leading to the weightage calculation of the variables indirectly researchers in all over the world also have discovered that AHP can be modified and used not only for military but in any sectors as well. From the military sector, the modification of AHP has been widely used in other sectors such as automotive, medical, education, business and also administration. It has also been discovered that AHP has given an impact in the property market field. The application of AHP in the property market has taken place in many ways such as assessment of building quality and performance, tenants perception and expectation, identification of the tenants or occupiers needs, investment portfolio as well as grading and classification. In a global context, the advanced AHP modification has been used in property research. However, in Malaysia, only a few property research had used AHP nevertheless, it has shown positive development. Therefore, this paper aims to identify the evolution of the AHP usages in a global and local context, especially in property sectors. The findings from this paper will highlight some critical issues in using AHP in property sectors and provides some suggestions for improving the use of it.

Suggested Citation

  • Mohd Safian, Edie Ezwan & Nawawi, Abdul Hadi, 2011. "The Evolution of Analytical Hierarchy Process (AHP) as a Decision Making Tool in Property Sectors," MPRA Paper 39442, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39442
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    References listed on IDEAS

    as
    1. Bender, A. & Din, A. & Hoesli, M. & Brocher, S., 1999. "Environmental Preferences of Homeowners: Further Evidence using the AHP Method," Papers 99.10, Ecole des Hautes Etudes Commerciales, Universite de Geneve-.
    2. Ball, J'Noel & Srinivasan, Venkat C, 1994. "Using the Analytic Hierarchy Process in House Selection," The Journal of Real Estate Finance and Economics, Springer, vol. 9(1), pages 69-85, July.
    3. Anish Sachdeva & Dinesh Kumar & Pradeep Kumar, 2008. "A methodology to determine maintenance criticality using AHP," International Journal of Productivity and Quality Management, Inderscience Enterprises Ltd, vol. 3(4), pages 396-412.
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    1. Mohd Safian, Edie Ezwan & Nawawi, Abdul Hadi, 2012. "Combining AHP with GIS in the evaluation of locational characteristics quality for purpose-built offices in Malaysia," MPRA Paper 39546, University Library of Munich, Germany.

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    More about this item

    Keywords

    Analytical hierarchy process; Decision Making Tool; Property Sector;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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