Property cash flow studies : focusing on model consistency and data accuracy

The high degree of variability and inconsistency in cash flow study usage by property professionals demands improvement in knowledge and processes. Until recently limited research was being undertaken on the use of cash flow studies in property valuations but the growing acceptance of this approach for major investment valuations has resulted in renewed interest in this topic. Studies on valuation variations identify data accuracy, model consistency and bias as major concerns. In cash flow studies there are practical problems with the input data and the consistency of the models. This study will refer to the recent literature and identify the major factors in model inconsistency and data selection. A detailed case study will be used to examine the effects of changes in structure and inputs. The key variable inputs will be identified and proposals developed to improve the selection process for these key variables. The variables will be selected with the aid of sensitivity studies and alternative ways of quantifying the key variables explained. The paper recommends, with reservations, the use of probability profiles of the variables and the incorporation of this data in simulation exercises. The use of Monte Carlo simulation is demonstrated and the factors influencing the structure of the probability distributions of the key variables are outline. This study relates to ongoing research into functional performance of commercial property within an Australian Cooperative Research Centre.

Longitudinal Student Evaluations of a Postgraduate Unit Using Importance-Performance Analysis

The Australian tourism tertiary education sector operates in a competitive and dynamic environment, which necessitates a market orientation to be successful. Academic staff and management in the sector must regularly assess the perceptions of prospective and current students, and monitor the satisfaction levels of current students. This study is concerned with the setting and monitoring of satisfaction levels of current students, reporting the results of three longitudinal investigations of student satisfaction in a postgraduate unit. The study also addresses a limitation of a university’s generic teaching evaluation instrument. Importance-performance analysis (IPA) has been recommended as a simple but effective tool for overcoming the deficiencies of many student evaluation studies, which have generally measured only attribute importance or importance at the end of a semester. IPA was used to compare student expectations of the unit at the beginning of semester with their perceptions of performance ten weeks later. The first stage documented key benchmarks for which amendments to the unit based on student feedback could be evaluated during subsequent teaching periods.