Feasibility studies are extensively used in Italy to determine land value but they tend to be single point analysis based upon a single set of “likely” inputs. In this paper we look at the practical impact of uncertainty in variables using a simulation model with an actual case study of an urban redevelopment plan for an Italian Municipality. This allows the appraiser to address the issues of uncertainty involved and thus provide the decision maker with a better understanding of the risk of development. This technique is then refined using a “two-dimensional technique” to distinguish between “uncertainty” and “variability” and thus create a more robust model.
“Uncertainty & Feasibility Studies: An Italian Case Study”
L. Gabrielli
2005-01-01
Abstract
Feasibility studies are extensively used in Italy to determine land value but they tend to be single point analysis based upon a single set of “likely” inputs. In this paper we look at the practical impact of uncertainty in variables using a simulation model with an actual case study of an urban redevelopment plan for an Italian Municipality. This allows the appraiser to address the issues of uncertainty involved and thus provide the decision maker with a better understanding of the risk of development. This technique is then refined using a “two-dimensional technique” to distinguish between “uncertainty” and “variability” and thus create a more robust model.
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