A fuzzy knowledge-based framework for risk assessment of residential real estate investments. Issue 1 (2nd January 2017)

• Record Type: Journal Article
• Authors: Ribeiro, Mónica I. F.; Ferreira, Fernando A. F.; Jalali, Marjan S.; Meidutė-Kavaliauskienė, Ieva
• Is Part Of: Technological and economic development of economy. Volume 23:Issue 1(2017)
• Page Start: 140
• Page End: 156
• Publication Date: 2017-01-02
• Subjects: decision making -- risk analysis of real estate investments -- residential real estate -- fuzzy cognitive maps; C44 -- C45 -- M10 -- R31; Sustainable development -- Periodicals; Construction industry -- Technological innovations -- Lithuania -- Periodicals; Construction industry -- Capital productivity -- Lithuania -- Periodicals; Construction industry -- Capital productivity; Construction industry -- Technological innovations; Lithuania; Periodicals; 338.4762409479
• DOI: 10.3846/20294913.2016.1212742
• Languages: English
• ISSNs: 2029-4913

Abstract

Abstract: Risk analysis of residential real estate investments requires careful analysis of certain variables (or determinants). Because real estate is a key sector for economic and social development, this risk analysis is seen as critical in supporting decision processes relating to buying or selling residential properties, partly due to the pressures caused by the current economic environment. This study aims to develop a conceptual reference model for risk assessment of residential real estate using fuzzy cognitive mapping. This fuzzy model allows cause-and-effect relationships between determinants to be identified and better understood, which in turn allows for better informed investment decisions. The results show that the use of cognitive maps reduces the number of omitted criteria and favors learning with regard to how the criteria relate to each other, holding great potential and versatility in structuring complex decision problems. Practical implications, strengths and weaknesses of our proposal are discussed.