Values and Evaluation

This paper summarizes and resets teaching materials of the “Culture of evaluation” course at the Bachelor’s Degree in Spatial Planning, Iuav University of Venice (Italy), 2015–2021. The materials are available from the IUAV website and were updated early 2019: http://​www.​iuav.​it/​Ateneo1/​docenti/​docenti201/​Patassini-/​materiali-/​valutazione-come-filosofia-pratica-2020.​pdf, http://​www.​iuav.​it/​Ateneo1/​docenti/​docenti201/​Patassini-/​materiali-/​rassegna-approcci-e-metodi-2020.​pdf.

The main classes are defined by gradients of exclusion and rivalry and include market and public goods, common and club goods. The two gradients define specific value domains and require different estimation procedures, see Hess and Ostrom [14].

Recent directives on risk, profitability and climate change (Cc) are leading European credit institutions to improve their property valuation process, using new data and analytical modelling. Relations between banks and real estate sectors are usually affecting the stability of financial systems. The European Banking Authority (Eba) is improving the efficiency of the entire bank credit value chain, considering real estate valuation impacts over all the steps. Efficiency and standardization in estimation methodologies are increasing by using big data and automated valuation models (Avm) in real time. Following the market comparison approach, Avm helps to estimate in real time market values of geo-referenced properties, including values of related guarantees with specific confidence intervals.

The growing attention to the green economy places the environmental and climate sustainability issues at the core, by estimating impacts of different types of risk on real estate values and collateral. Worth saying that real estate has significant balance sheet effects within credit institutions. As owners of large real estate assets, their re-valuations can generate significant capital gains.

Recently, real estate valuations have sought a fairness that goes beyond prudential supervision to become a constitutive element of civil law.

THE system modelling may refer to two paradigms of urban and regional sciences: the first considers the flows as dependent variables of locations; the second recognizes locations as dependent variables of flows (a sort of domination of flows over places). Batty focuses on the modelling effects of second paradigm, see Batty [2]. The role of information in valuation models is analysed by McDonald [22].

UNCERTAINTY of theories, incompleteness of answers and judgments are the only certain outcome, but at the same time a hint of plausibility, a sort of process effectiveness that help to proceed with the analysis and adjust the theories, see Veca [41], four lectures on incompleteness.

From the Greek ἄξιος, valid, worthy and λόγος, proposition, reason.

Kluckhohn [17], pp. 116–132. See also Kluckhohn [18].

Galantino [10], article on the meanings of ‘value’ term.

LEAVING ancient thought in the background, theories of value have developed dynamically in economics since the seventeenth century. They have evolved along with technological changes, division of labour and the organization of society. Mercantilists were interested in trade and the amount of gold that was produced, the sale of goods and competitiveness. Physiocrats recognized the value of agricultural labour, adopting Quesnay’s first systematic theory of value in an economy conceived as a ‘metabolic’ system: if the extraction of value by unproductive actors outweighs the creation of value by productive actors of the society the growth stops. The value was created around a ‘production boundary’. The classics recognized the value of industrial work, the concept of surplus value. In this case, the value becomes closely associated with the costs of production and reproduction (of the labour force conceived as capacity) and the values determine the prices. The neoclassicals give up this approach by privileging the subjective preferences of economic actors, thus overturning the value-price relationship. According to them, it is the value based on utility that determines production costs and therefore prices (see Mazzucato [21], in particular chapter one). With the subjective theory of value of marginalism, every income becomes a reward for a productive activity and every action must be evaluated on the basis of its consequences in a given context. Consequentialism is one of the characteristics of utilitarian ethics.

Mazzucato [21], ivi. One of the central topics of the text is the ‘production boundary’, its historical interpretation in relation to the growth of financial sector and frenzied short-term earnings. The author also explains how the role of creator of value of public sector has been widely underestimated by the so-called ‘creators of wealth’.

IN the transition from political economy to economics, new concepts such as shareholder value, shared value, value chain, value for money (optimal combination of costs and value of service delivery systems), adding value (not to be confused with value added) emerge. The same term valuation (already used by Dewey [7] and other pragmatists at the beginning of the twentieth century) is reduced to an estimating practice, in support of real estate assessment procedures being perfected. The concept of value for money has significantly influenced cost–benefit analysis and variants of critical utilitarianism: see, for example, Lichfield [20] and Moroni [26] critical notes.

The assumption ‘what is bought has value’ changes the boundaries between productive and unproductive domains and dissolves the concept of rent, as the history of economic thought testifies. The assumption expels the government itself and, to some extent, also public spending from the domain of production, limiting the effectiveness of the concept of multiplier and of public expenditure itself. The public creditor is not necessarily a preferred creditor.

Pareto argues that maximization does not require a notion of cardinal utility: an ordinal utility should suffice. Taking up the criticisms of A Sen, it would be a relative optimal point. The difficult task of compensating for the absolute utility differentials, that characterize social inequalities, would thus be entrusted to the maximization of ordinal utility. However, the ordinal scale, unlike the interval or ratio scale, dulls the trade-offs.

Tversky and Kahneman [39], pp. 297–323.

Polanyi [31].

http://​www.​iuav.​it/​Ateneo1/​docenti/​docenti201/​Patassini-/​materiali-/​valutazione-come-filosofia-pratica-2020.​pdf, pp. 17–19. See, in detail, Leon [19].

ON ‘public values’ see Bozeman [3]. The author exemplifies the difficulties of economic criteria to adequately appreciate the values of social choice. And this with particular reference to privatization policies of collective services or appropriation of common goods. Stiglitz [38] highlight that what we measure affects what we do, and if our measurements are flawed, decisions can be biased. Specifically, the three authors highlight the limits of GDP as an estimate of the effective production capacity, wealth and well-being of a country and the effects that the reference to ‘public value’ may have on it. A question then arises: what values should GDP represent, taking into account that it can be considered in terms of production (goods and services), sum of income generated or demand (goods and services consumed, including inventories)?.

Freeman el al. [8]. The text develops the studies of Freeman [9].

Galimberti [11], p. 261 (our translation).

Galimberti [12], p. 174 (our translation).

For example, the exchange values, use and non-use values can be transformed into ‘coefficients’. If the former might be proxies of terms of trade, the latter and the third refer to other factors. Use values derive from the possibility of benefiting from an asset. They can be direct, extractive (use of raw materials) and non-extractive (landscape, cultural heritage, etc.). Use values are considered indirect when the interaction with the asset is not voluntary. Use can be current if observable, optional if it gives a chance of using assets at another time or place; quasi-optional, to avoid losing the possibility of using an asset in the future, even if there is no certainty to do it. We are dealing with non-use (passive) values whenever willing to give up an asset to preserve it regardless of likelihood of using it (value of existence): as long as future generations use it (bequest value), along with other subjects or communities (value of vicar). This taxonomy is used when estimating the so-called ‘total economic value’ following holistic approaches.

AS Sen [36] reminds us, evaluation can be understood as a ‘conflict among competing priorities’ in a plurality of value domains. Conflict is here considered in a broad sense, up to and including competitive spirit: a clash among opponents, players and not necessarily enemies. Even if evaluation suggests comparative reflection (a kind of pause or waiting), conflict can grow or decrease in intensity. Evaluation practice can settle to map a conflict. Evidence-based approaches (EV) are rather efficient in mapping tests. But, whenever a conflict is not only represented, but interpreted and lived as experience, we enter what a certain practical philosophy defines as a hermeneutic approach, a ‘practice-oriented approach’ or ‘practice-based’ (PV): a process of adaptation, rather than knowledge and truthfulness,a peculiar way of ‘inhabiting’ the conflict. PV is not limited to consider the conflict as a fate of interaction, but as language game (verbal or somatic, direct or allusive) which has always something to say, which invites to listen and look, alerts and informs. While in EV the evaluator maps and works on the conflict, ‘sure’ of his own scientific and rational tools, in PV he is himself involved as an interpreter in the process that feeds (him): he shares the event, being in its history and in its languages. He is in-between. With his interpretation, he can lead, simplify or complicate it. I owe this distinction between EV and PV to T A Schwandt to whom I dedicate few years ago a sort of double review, see http://​www.​iuav.​it/​Ateneo1/​docenti/​docenti201/​Patassini-/​materiali-/​dialogo-con-TA-Schwandt.​pdf.

House [16], p. 137.

Moore [25].

The main acknowledged champions of the controversy were Weber, Sombart and Schmoller.

Hirschman offers an interesting comment on the Latin saying de gustibus non (est) disputandum. There is no question about tastes, they are just tastes. But if one begins to discuss them, they ipso facto cease to be tastes to become values, see Hirschman [15].

The evaluative proposition belongs to the extended class of linguistic propositions. In common language, the use of the word ‘proposition’ is often combined with the use of the term ‘true’ or ‘likely’. It is true that? Can a given effect be considered likely or justifiable? Plausible answers can be obtained if there is agreement in definitions, contents and judgments. A proposition is understood if language is clear and a technique mastered. Propositions can take the form of statements, questions, orders, hypotheses, and alike.

Vattimo and Zabala [40], p. 32 (on Heidegger).

Davidson suggests ‘evaluation rubrics’ to make values explicit and aggregate them into performative evidence. A rubric, called ‘global assessment scale’, proposes a set of criteria (with reference standards or thresholds) and related performances. Each performance is described by a profile and graded on an ordinal scale (for example, from insufficient to excellent, or from extremely risky to extremely safe, etc.). A single rubric can be design for all performances or different rubrics for each performance and related modalities. Worth saying that the problem of both metric and semantic aggregation to formulate a synthetic judgment is unsolved. However, rubrics are widely used for participatory evaluations or cross-program evaluations, see Davidson et al. [6].

SEE term ‘Values’ edited by Schwandt [33], pp. 443–444. The term explanation is inspired by Schwandt [34]. See also House and Howe [16].

See Mertens [23].

Patton [30]. Four principles define the critical foundations of a connected discourse: global thinking, Anthropocene as a context, transformative engagement and integration.

Patton [29]. The principle- focused evaluation (P-FE) assesses whether actions comply with basic principles and if, on this basis, the expected results are achieved. The principles refer to value systems and function as a ‘rudder’ in conditions of uncertainty, turbulence or in complex environments. Patton provides a frame (called GUIDE, a sort of rubric) to recognize whether the principles provide useful guidance (G), whether they are useful (U), enlightening or stimulating (I), developmentally adaptable (D) and evaluable (E).

Rothman [32].

Since the late 1990s, collaborative law has worked in this direction with the seminal work of the lawyer Webb in the USA and the publication of Cameron [5].

See illuminative evaluation in http://​www.​iuav.​it/​Ateneo1/​docenti/​docenti201/​ Patassini-/materiali-/rassegna-approcci-e-metodi-2020.pdf.

Patton [28].

Guba and Lincoln [13].

In this case, evaluation is conceived as a ‘science of consequences’.