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The Analytical Foundations of Adjustment Grid Methods
Author(s) -
Colwell Peter F.,
Cannaday Roger E.,
Wu Chunchi
Publication year - 1983
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00277
Subject(s) - weighting , grid , econometrics , computer science , regression analysis , real estate , regression , economics , focus (optics) , operations research , mathematical economics , mathematics , statistics , machine learning , optics , radiology , medicine , physics , geometry , finance
Within the market data approach to real estate appraisal, two basic types of analysis generally are used: (1) regression analysis; and (2) adjustment grid methods. The focus of this paper is on the adjustment grid methods. Three such methods are identified in the appraisal literature, but their analytical foundations are not clearly presented. The primary objective of this paper is to clarify the analytical foundations of each method. In addition, various ways to estimate the adjustment factors needed to apply the grid methods and a weighting scheme for reconciliation of indicated values are presented. Also, the possible advantage of grid‐based over purely regression‐based predictions is identified.