A latent variable model is a statistical model that relates a set of variables (so-called manifest variables) to a set of latent variables.
DEFINITION of 'Functional Obsolescence'. A reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed.The term is commonly used in real estate, but has a wide application.Next Up. reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed. The term is commonly used in real estate, but has a wide application. Next Up.
Figure 1: A classification of depreciation and obsolescence Site and value changes and building depreciation The existing use value of a property investment may be notionally split into two parts: site and building.henkel (1984) uses the terms physical depreciation, functional obsolescence and economic obsolescence, and confirms a (to date in this introduction) missing detail: Economic depreciation also is not curable. The examples (in the text) refer to environmental or neighbourhood factors that reduce a dwelling's value.