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A Further Examination of Appraisal Data and the Potential Bias in Real Estate Return Indexes
Author(s) -
Gau George W.,
Wang Ko
Publication year - 1990
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 - 10.1111/1540-6229.00508
Subject(s) - real estate , economics , econometrics , capitalization rate , estate , rate of return , actuarial science , income approach , financial economics , real estate investment trust , finance
Recent articles by Giliberto [2] and Geltner [1] examine the biases inherent in the use of appraisal data in real estate performance measurement. This note takes another look at the direction and magnitude of any bias in holding period returns. Using appraisal data from a commingled real estate fund, we show that in actual application the size of the holding period return bias can be quite small and this bias may have no appreciable effect on real estate return indexes.