Fuzzy Logic: The New Paradigm for Decision Making

August 1997, Vol 22, No 2

Abstract: Fuzzy logic is a system for decision making that is relatively new, particularly in terms of applications in the social sciences. While it has been studied and applied for some 20 years in the physical sciences, its applicability to the social sciences – and real estate analysis, in particular – has been recognized only recently. The goal of fuzzy logic is to enable analysts to quantify the imprecision inherent in estimates and evaluations. Derived from the classical set theory of mathematics, in which an observation either belongs or does not belong to a set, fuzzy logic employs fuzzy sets that allow membership in a set to vary from 0 to 1. This article describes the general nature of fuzzy logic and presents an example to illustrate a simple application to real estate. Finally, a conceptual framework for a more complex fuzzy system is developed.