A valuation puts a monetary figure on something — what a house, a company or a painting is worth. An evaluation is a judgement of quality, performance or effectiveness, and usually produces a verdict rather than a number. Valuations are financial; evaluations are assessments.
The core difference
- valuation — an estimate of monetary worth: a valuation of £400,000, the company's valuation
- evaluation — an assessment of how good, effective or suitable something is: an evaluation of the programme
The clue is inside the words. Valuation is built on value in its money sense; evaluation is built on the verb evaluate, to judge.
The test
Ask whether the answer is a number with a currency attached. If yes, it is a valuation. If the answer is a judgement — works well, needs revision, met three of five objectives — it is an evaluation.
Where they meet
Business writing blurs them, because assessing a company often involves both: you evaluate the management and the market, and you arrive at a valuation. Keeping them apart is worth the effort precisely because a reader will assume a figure when they see valuation.
The people who do them
- A valuer or appraiser produces a valuation. Appraiser is the usual American term.
- An evaluator or assessor produces an evaluation.
Note that appraisal straddles both: a property appraisal is a valuation, while a staff appraisal is an evaluation. Context decides which sense is in play.
Frequently asked questions
What is the difference between valuation and evaluation?
A valuation estimates monetary worth and produces a figure; an evaluation assesses quality or effectiveness and produces a judgement.
Which one applies to a house?
A valuation — it puts a price on the property. A survey, by contrast, evaluates its condition.
Is an appraisal a valuation or an evaluation?
Both, depending on context. A property appraisal is a valuation; a staff appraisal is an evaluation.