In appraising, if a property improvement adds value less than its cost, what concept is illustrated?

The concept illustrated when a property improvement adds value less than its cost is known as contribution. In real estate appraising, the principle of contribution suggests that the value added by a specific improvement is not always equal to the cost incurred to make that improvement. Instead, the value is based on the benefit derived from the improvement in relation to the overall property. If the improvement does not significantly enhance the overall value of the property beyond its cost, it exemplifies this principle.

Other options, although related to real estate and appraising, do not specifically address the situation described. The income approach focuses on the value of a property based on the income it generates. Depreciation refers to a reduction in property value over time due to wear and tear or obsolescence. Comparative market analysis involves determining the value of a property based on the sale prices of similar properties in the area, which may not directly relate to the cost-value relationship of specific improvements. Therefore, contribution is the most relevant concept in this context.