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Aspect, outlook and exposure to noise attach to the individual unit and are micro factors

A worked RES examination question on macro micro factors, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 1Lesson 9Macro micro factorsFree — no sign-up

The question

A prospective buyer is choosing between two units in the same development, on the same floor, of identical layout and area, released at the same price by the same seller. One faces a sheltered internal garden and is quiet at all hours. The other faces an expressway, from which traffic noise is clearly audible with the windows open and faintly so with them closed. He has been told that since both units sit in the same development and the same market, any price difference between them must be arbitrary.

Which statement most appropriately describes the factor at work?

  1. A. A micro factor, being specific to the individual unit rather than to the market.
  2. B. A macro factor, since traffic volumes reflect the state of the wider economy.
  3. C. Economic obsolescence, since the expressway lies beyond the boundary.
  4. D. No identifiable factor, aspect being a matter of personal taste alone.

The answer, and why

Answer: A

The rule. Aspect, outlook and exposure to noise attach to the individual unit and are micro factors. They explain divergence between units within the same development.

Why A is correct. Two units in the same development on the same floor differ only in what they face. That is micro.

The other options.

  • B treats traffic volumes as a macro proxy, which would affect both units alike.
  • C reaches for economic obsolescence, which concerns a change beyond the boundary reducing value over time — here the expressway is an existing condition distinguishing two units, not a change affecting the development.
  • D dismisses the factor as taste, when the effect on demand is systematic.

Exam note. A factor that separates two units in one development is micro by definition, however external its physical source.

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