Determinants of the causes and effect of inconsistency in compensation valuation

Abstract

Valuation as a core mandate of professional Estate Surveyors and Valuers is an important tool of financial and credit decisions for individuals, organisations and government. In order to ensure sound and reliable decisions, accurate and reliable valuation is indispensable. This study explored the determinants of the causes and effects of inconsistency in compensation valuation in Abuja, Nigeria. Using a cross-sectional survey research strategy, structured questionnaires were administered to a sample of 83 professional Estate Surveyors and Valuers in Abuja, Nigeria. A total of 62 questionnaires were used for analysis representing about 75 % response rate. A 5-Likert point scale was used to measure the response and data was analyzed using descriptive statistics (mean, standard deviation) and inferential statistics (Factor Analysis and Pearson's Correlation). It was found that a lack of in-depth knowledge of the cost of the latest building components and technology in the study area is the major cause of inconsistency in compensation valuation. Likewise, it was found that the effect of inconsistency in compensation valuation is more on the professional body as it leads to a poor image in society, whereas the effect on individual professionals is attributed to loss of trust from the client. Furthermore, small to medium positive relationships were established among the perceived effects and causes of inconsistency in valuation. The study recommends that valuers should upskill professionally to align with international standards and the growing user demand for more reliable valuation.