Expert judgement in the Processes of Commercial Property Market Forecasting
AbstractIn this paper we investigate the role of judgement in the formation of forecasts in commercial real estate markets. Based on interview surveys with the majority of forecast producers, we find that real estate forecasters are using a range of inputs and data sets to form models to predict an array of variables for a range of locations. The findings suggest that forecasts need to be acceptable to their users (and purchasers) and consequently forecasters generally have incentives to avoid presenting contentious or conspicuous forecasts. Where extreme forecasts are generated by a model, forecasters often engage in ‘self-censorship’ or are ‘censored’ following in-house consultation. It is concluded that the forecasting process is more complex than merely carrying out econometric modelling and that the impact of the influences within this process vary considerably across different organizational contexts.
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Bibliographic InfoPaper provided by Henley Business School, Reading University in its series Real Estate & Planning Working Papers with number rep-wp2004-11.
Length: 24 pages
Date of creation: 2004
Date of revision:
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- H Stekler & R A Fildes, 1999.
"The state of macroeconomic forecasting,"
539557, Lancaster University Management School, Economics Department.
- William C. Wheaton & Raymond G. Torto, 1988. "Vacancy Rates and the Future of Office Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(4), pages 430-436.
- Dean Croushore, 1993. "Introducing: the survey of professional forecasters," Business Review, Federal Reserve Bank of Philadelphia, issue Nov, pages 3-15.
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