Hume’s guillotine - the ‘is-ought’ problem in property valuation theory

ABSTRACT

This paper introduces Hume’s law (the fulcrum of the ‘is-ought’ problem of moral philosophy) into the property valuation literature, and uses it as a prism to reflect on the nature and limitations of standard valuation theory. The paper shows how a consideration of Hume’ thesis can help to clarify and solve some specific practical problems in property valuation. The opportunity presented by the subject of property valuation is, in turn, used to reflect back on Hume’s thesis itself, to show conditions under which Hume’s law may be said to be false. The paper makes important contributions both to the property valuation literature and to the literature on moral philosophy. With respect to property valuation, it proposes a change in the manner conclusions of valuations are reported, and the replacement of the notion of valuation accuracy by the wider and more socially appropriate concept of reasonableness.

KEYWORDS:

• Market value
• Hume’s law
• 'is-ought' problem
• property valuation
• valuation theory

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Manya Mooya

Dr. Manya M. Mooya is currently an Associate Professor of Property Studies in the Department of Construction Economics and Management at the University of Cape Town. He holds a PhD in Real Estate from the University of Pretoria, an MPhil in Land Economy from the University of Cambridge and a BSc in Land Economy from the Copperbelt University.