Finance, Markets and Valuation
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Title: Mass appraisal of residential real estate using multilevel modelling
Authors: Iván Arribas, Rima Tamošiūnienė
DOI: Not found
Abstract:
Accurate real estate valuation, especially residential real estate valuation, is a topic with a high social and economic impact. Among the methods employed for mass valuation, econometric models are the more widely used. Nevertheless, these models have some drawbacks as they assume some hypothesis which are unrealistic, considering the individuals in the sample as independent and they do not consider the hierarchical data structure. This paper applies a Hierarchical Lineal Model (HLM) to overcome this problem. The model is employed on a big database with three hierarchical levels: apartment, neighborhood and city. It is concluded that HLM improves the traditional econometric model OLS both in terms of goodness of fit and residual variance.
Keywords: Not found
