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 A reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed.The term is commonly used in real estate, but has a wide application.Next Up. reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed.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.
Depreciation, as used in appraisal, is the loss in value from any cause. The sources of. depreciation may be categorised into three classifications: physical deterioration, functional. obsolescence, and economic obsolescence. Physical deterioration is the loss in value due to. the actual wearing out of the improvements.