An Investigation into the Impact of Previous Expert Value Estimates on Appraisal Judgment

Abstract

Is appraisal judgment influenced by the previous value estimates of other experts? This paper documents an investigation into this question. The literatures on appraisal smoothing and heuristic anchoring were explored to build a theoretical and empirical base. Research methods involved asking apprentice and expert appraisers, some supplied with the previous value estimate of an anonymous expert, to estimate the value of a vacant tract of industrial land. The strong support expected for the contention that appraisers are influenced by the previous value judgments of anonymous experts was not found. Whereas differences between the groups supplied with the previous value estimate and those who were not were in the direction consistent with anchoring, these results were not statistically significant, suggesting that anchoring may be more subtle than generally believed.