IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

An Analysis of the Relationship between Price and Variance for Homogeneous Housing Stock

This study examines the structure of price variance for homogeneous residential housing stock, where homogeneous is defined as economically equivalent, not necessarily physically identical. Assessed values, obtained from ad valorem tax rolls, are used as the basis for identifying properties considered to be economically equivalent. From these data an investigation of the distribution of sale price and variance for housing in selected value ranges is conducted. Subsequently, ANOVA is performed to determine the composition of variance through time and across cities within one metropolitan housing market. In line with conventional wisdom, we find that variance increases with price over the entire data set. The increase, however, is not constant nor does it exhibit a simple proportional relationship to price. Variance increases at an increasing rate in the lower to mid-price ranges and continues to increase but at a decreasing rate in the upper price ranges. From this it was determined that the functional relationship between price and variance is best approximated by a quadratic function in the lower to mid-price ranges and a cubic function when higher price properties are included. ANOVA results indicate that variance is significantly different through time and across location. The interactive term was also significant. The findings of this study would appear to have implications for fee appraisers, assessors, investors, and mortgage lenders.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full text
Download Restriction: no

Article provided by American Real Estate Society in its journal Journal of Real Estate Research.

Volume (Year): 6 (1991)
Issue (Month): 1 ()
Pages: 99-112

in new window

Handle: RePEc:jre:issued:v:6:n:1:1991:p:99-112
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:

Order Information: Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
Web: Email:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. William A. Donnelly, 1989. "The Methodology of Housing Value Assessment: An Analysis," Journal of Real Estate Research, American Real Estate Society, vol. 4(2), pages 1-12.
  2. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:6:n:1:1991:p:99-112. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.