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Total Grid Estimation

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Abstract

This article provides a matrix representation of the adjustment grid estimator. From this representation, one can invoke the Gauss-Mrkov theorem to examine the efficiency of ordinary least squares (OLS) and the grid estimator that uses OLS estimates of the adjustments (the "plug-in" grid method). In addition, this matrix representation suggests a generalized least squares version of the grid method, labeled herin as the total grid estimator. Based on the empirical experiments, the total grid estimator outperformed the plug-in grid estimator, which in turn outperformed the OLS.

Suggested Citation

  • R. Kelley Pace, 1998. "Total Grid Estimation," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 101-114.
    • Handle: RePEc:jre:issued:v:15:n:1:1998:p:101-114
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    References listed on IDEAS

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    1. Richard K. Green, 1994. "Optimal Comparable Weighting and Selection: A Comment," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 22(4), pages 647-654, December.
    2. Kerry D. Vandell, 1991. "Optimal Comparable Selection and Weighting in Real Property Valuation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(2), pages 213-239, June.
    3. George W. Gau & Tsong‐Yue Lai & Ko Wang, 1992. "Optimal Comparable Selection and Weighting in Real Property Valuation: An Extension," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(1), pages 107-123, March.
    4. Hans R. Isakson, 1986. "The Nearest Neighbors Appraisal Technique: An Alternative to the Adjustment Grid Methods," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 14(2), pages 274-286, June.
    5. Joseph B. Lipscomb & J. Brian Gray, 1990. "An Empirical Investigation of Four Market-Derived Adjustment Methods," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 53-66.
    6. Mark G. Dotzour, 1988. "Quantifying Estimation Bias in Residential Appraisal," Journal of Real Estate Research, American Real Estate Society, vol. 3(3), pages 1-11.
    7. R. Kelley Pace, 1998. "Appraisal Using Generalized Additive Models," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 77-100.
    8. Peter F. Colwell & Roger E. Cannaday & Chunchi Wu, 1983. "The Analytical Foundations of Adjustment Grid Methods," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 11(1), pages 11-29, March.
    9. Han‐Bin Kang & Alan K. Reichert, 1991. "An Empirical Analysis of Hedonic Regression and Grid‐Adjustment Techniques in Real Estate Appraisal," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(1), pages 70-91, March.
    10. Gilley, Otis W & Pace, R Kelley, 1995. "Improving Hedonic Estimation with an Inequality Restricted Estimator," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 609-621, November.
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    Cited by:

    1. Brasington, David M., 2001. "Capitalization and Community Size," Journal of Urban Economics, Elsevier, vol. 50(3), pages 385-395, November.
    2. David M. Brasington & Diane Hite, 2005. "Demand for Environmental Quality: A Spatial Hedonic Approach," Departmental Working Papers 2005-08, Department of Economics, Louisiana State University.
    3. Brasington, David M. & Hite, Diane, 2005. "Demand for environmental quality: a spatial hedonic analysis," Regional Science and Urban Economics, Elsevier, vol. 35(1), pages 57-82, January.
    4. David Brasington & Don Haurin, 2005. "Capitalization of Parent, School, and Peer Group Components of School Quality into House Price," Departmental Working Papers 2005-04, Department of Economics, Louisiana State University.
    5. Takafumi Kato, 2008. "A Further Exploration Into The Robustness Of Spatial Autocorrelation Specifications," Journal of Regional Science, Wiley Blackwell, vol. 48(3), pages 615-639, August.
    6. David M. Brasington, 1999. "Which Measures of School Quality Does the Housing Market Value?," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 395-414.
    7. Brasington, David M., 2002. "Edge versus center: finding common ground in the capitalization debate," Journal of Urban Economics, Elsevier, vol. 52(3), pages 524-541, November.

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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