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The valuation of real estates (e.g., house, land, among others) is of extremeimportance for decision making. Their singular characteristics make valuationthrough hedonic pricing methods dificult since the theory does not specify thecorrect regression functional form nor which explanatory variables should beincluded in the hedonic equation. In this article we perform real estateappraisal using a class of regression models proposed by Rigby & Stasinopoulos(2005): generalized additive models for location, scale and shape (GAMLSS). Ourempirical analysis shows that these models seem to be more appropriate forestimation of the hedonic prices function than the regression models currentlyused to that end.

Real estate appraisal of land lots using GAMLSS models