Precisely wrong or roughly right? An evaluation of development viability
Byrne, P., McAllister, P. and Wyatt, P., (2010) Precisely wrong or roughly right? An evaluation of development viability. Working Papers in Real Estate & Planning. 08/10. Working Paper. University of Reading, Reading. pp30.
This paper investigates the effect of choices of model structure and scale in development viability appraisal. The paper addresses two questions concerning the application of development appraisal techniques to viability modelling within the UK planning system. The first relates to the extent to which, given intrinsic input uncertainty, the choice of model structure significantly affects model outputs. The second concerns the extent to which, given intrinsic input uncertainty, the level of model complexity significantly affects model outputs. Monte Carlo simulation procedures are applied to a hypothetical development scheme in order to measure the effects of model aggregation and structure on model output variance. It is concluded that, given the particular scheme modelled and unavoidably subjective assumptions of input variance, that simple and simplistic models may produce similar outputs to more robust and disaggregated models.