Municipal Non-Residential Real Property Valuation Forecast Accuracy
AbstractThe objective of this study is to estimate the accuracy and/or reliability of alternative methods of forecasting property valuations of non-residential real commercial and industrial property in El Paso to improve municipal revenue forecasting. This study seeks to identify and evaluate four econometric and statistical alternatives to present forecasting practices for nonresidential property valuation forecasts: (1) a traditional income elasticity method, (2) a regional structural econometric model, (3) a statistical ARIMA method, and (4) trend analysis. In order to evaluate the four models, ex ante forecast simulations are created for each modeling approach and then compared to random walk and random walk with drift models for both commercial and industrial property values. Results indicate that the random walk with drift model outperformed all four models for both commercial and industrial property values. In addition, results also indicate that the random walk model outperformed all four models for industrial property values.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32116.
Date of creation: 22 Oct 2010
Date of revision: 11 Feb 2011
Publication status: Published in International Journal of Business & Economics Perspectives 1.6(2011): pp. 56-77
Non-residential property valuation forecasts; regional economics; applied econometrics;
Find related papers by JEL classification:
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
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