Market value in a sea of values: re-examining the theory of value of land and property through the lens of capability theory

Jyoti Shukla and Mike McDermott

Chapter 6 in A Research Agenda for Real Estate, 2022, pp 99-119 from Edward Elgar Publishing

Abstract: Real estate appraisal has so far been narrowly focusing on ‘value' as the transaction price of land and property. Standard appraisal practices fail to assess the value of land/property in a ‘non-standard' setting such as when the land is not registered; when land is acquired compulsorily (as opposed to wilful exchange); and when there are multiple stakeholders of the land with varying levels of claims, such as in case of community-owned land. This is attributed to inadequate attention to the theory of value; and also, the inadequacy of theories to fully comprehend plurality and multidimensionality of value of land and property. This chapter re-examines the theory of value and the possibility of using the theoretical framework of ‘capability', by Amartya Sen, to fully comprehend the plural value of land/property and explain why land is more valuable than its transaction value; and why is the value of land different for an individual, community, and the market. While paving the way for future research on above-mentioned problems concerning the ‘value' of land, this chapter revitalises the discussion on the ‘theory of value' and initiates the debate whether Sen's ‘capability theory' can provide a comprehensive, theoretically rational framework to land/property value.

Keywords: Economics and Finance; Urban and Regional Studies (search for similar items in EconPapers)
Date: 2022
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