Aspects of information processing in valuation judgement and choice

Abstract

Summary Relatively little research has been conducted into the way in which valuers process the evidence they use in producing valuations. This paper reports upon an investigation to explore the applicability to valuers of aspects of information‐processing theory. Three phenomena which may lead to distortions in the use of evidence are considered. These are anchoring, and two ‘presentational’ effects, namely recency and dilution. The findings lend support to the presence of anchoring, and to the significance of the presentation order for positive evidence. The results point to the importance of recognizing the possible influence of these phenomena when formulating expectations about valuation accuracy, and of reviewing valuation procedures so as to minimize their possible effects.