A historical narrative of value theory in economics and appraisal

Abstract

The concept of value has been central to economic thought for centuries; the idea of what makes something valuable shapes how we exchange, produce, invest, and measure well-being. Neoclassical traditions have dominated the contemporary economic framework, privileging financial value as the primary metric of worth. This emphasis on quantifiability, reinforced by positivist methodologies, has marginalised broader considerations of multiple values and incommensurability. Real estate valuation perfectly embodies and exemplifies these tensions. This disjuncture between theory and practice reflects a broader issue within economics: the persistence of an overly narrow understanding of value. In response to these challenges–ranging from sustainability commitments to shifting societal priorities–we turn to a historical narrative of value theories to examine how foundational assumptions about value shape economic thought, resource allocation, and societal priorities. Recent studies point to a growing dissatisfaction with existing valuation models along with a shifting value paradigm: one that increasingly recognises multiple forms of values, the limits of commensurability, and the influence of social and ecological considerations on the practice of appraisal.