The cost approach to value, or appraisal by summation, is based on the principle of

Supply and demand are crucial economic principles that influence property values in a market context. However, they do not directly drive the calculations in the cost approach, which specifically focuses on the cost to replace a property rather than market dynamics. Therefore, while relevant to overall market valuation, supply and demand do not apply to the cost approach methodology.

Regression and progression refer to the effects of surrounding properties on a subject property’s value, indicating that a property may be worth less when surrounded by lower-value properties (regression) or more when surrounded by higher-value properties (progression). These concepts relate to comparative market analysis rather than the cost approach, which focuses strictly on the cost of replacement.

Plottage is the increase in value that results from combining smaller parcels of land into a larger one, often due to improved utility or development potential. While relevant in land development contexts, plottage does not apply to the cost approach, which is centered on replacement costs rather than land assemblage.