Chapter 1

Introduction to Appraisal Theory and Terms

The basis of most appraisal theory is the concept of substitution. People use this theory in everyday life to some extent, as they are confronted with choices in purchasing various items. In its most basic distillation, they compare the same product or similar products that are offered at different prices. The question that often arises is this one: Can a less expensive product be substituted for a more costly one without a loss in quality?

A generic medicine may be cheaper than its brand-name competitor, but is the substitute for the name brand just as effective, safe, and reliable? Given the choice of various automobiles with similar characteristics, a buyer might wonder if it is worth saving ...

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