Estimating Property Values by Replication: An Alternative to the Traditional Grid and Regression Methods
AbstractThis paper proposes and develops a replication method for estimating property values, in which optimal weights of comparable property attributes that best duplicate the subject property are determined. In a setting where the number of comparables is large compared to the number of attributes, replication weakly outperforms traditional general least squares regression by making use of potential correlations in the error structure. A similar result obtains in comparison to the grid method, which may suffer from subjective price adjustment factors. The replication method suggests using a large sample regression analysis to obtain the functional form of the error variance-covariance, and then replicating the subject with a smaller, attribute-close set of comparable properties.
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Bibliographic InfoArticle provided by American Real Estate Society in its journal journal of Real Estate Research.
Volume (Year): 30 (2008)
Issue (Month): 4 ()
Contact details of provider:
Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Web page: http://www.aresnet.org/
Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
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