VALUATIONS OF DEVELOPMENT SITES USING THE STOCHASTIC DECISION TREE METHOD Available to Purchase

Deterministic valuations of any type are increasingly subjected to criticism. Single point estimates of market value are arguably insufficiently informative where the estimate is prone to error. Residual valuations are probably most open to variation as a result of changes in the variable inputs, that is to say the result is sensitive. This paper suggests that if the probability and degree of error are made explicit in any development appraisal the potential developer can at least judge how much risk is involved and is thus better equipped to make a decision. Existing microcomputer programmes can be utilised for this purpose, together with published statistical tables, so that non‐mathematicians can reach valuable conclusions hitherto available only after very complex calculations.