Principle of Substitution (Principe de substitution)

In the appraisal of Real Estate the principle of Substitution (Cost, Income Capitalization & Comparison Approaches) states that a potential owner will pay no more for a property than the amount for which a property of like utility may be purchased; that a property's value tends to be set by the cost of acquiring an equally desirable substitute. The principle of substitution states that no buyer will pay more for a good than he or she would have to pay to acquire an acceptable substitute of equal utility in an equivalent amount of time.