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Linear and Nonlinear Weighing of Property Features Cover

Linear and Nonlinear Weighing of Property Features

By: Anna Barańska  
Open Access
|Apr 2019

Abstract

Determining the weights of market features of real estate in explaining their prices is one of the basic objectives of market analysis, performed as part of the property value estimation process. In practice, property appraisers usually settle for basic methods of determining weights, for example based on the principle of ceteris paribus or on the basis of linear correlation coefficients. The article proposes the use of curvilinear correlation coefficients for this purpose; an attempt of such use was made and the obtained results were compared with the weights determined on the basis of linear correlations. The conducted analyses proved that the inclusion of curvilinear correlations at the stage of market analysis, allows for extracting a greater number of features recognized as price-creating, i.e. leads to a smaller loss of market information and is a more reliable tool for determining the weights of attributes in price explanation.

Language: English
Page range: 59 - 68
Published on: Apr 15, 2019
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year

© 2019 Anna Barańska, published by Real Estate Management and Valuation
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.