Economic Life

Definition: Economic life is the period during which an improvement is expected to contribute value to the property.

Example

A building may remain standing after changing market needs make its existing use economically obsolete.

Keep the distinction clear

Economic life is not the same as physical life or a tax recovery period. Remaining economic life concerns the contribution still expected after the valuation date.

Related terms

Effective Age · Depreciation · Highest and Best Use

Keep studying

Tax Depreciation: Land, Building Basis, and Recovery Periods

References: California DRE: appraisal and valuation concepts

Pronunciation (US): ee-kuh-NOM-ik LYF (capitals show stress)

Pronunciation reference: Merriam-Webster