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Optimal Comparable Selection and Weighting in Real Property Valuation: An Extension
Author(s) -
Gau George W.,
Lai TsongYue,
Wang Ko
Publication year - 1992
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 - 10.1111/1540-6229.00574
Subject(s) - weighting , valuation (finance) , extension (predicate logic) , econometrics , real estate , property (philosophy) , economics , constraint (computer aided design) , mathematical economics , selection (genetic algorithm) , quadratic equation , computer science , mathematics , mathematical optimization , artificial intelligence , finance , medicine , philosophy , geometry , epistemology , radiology , programming language
Vandell (1991) recently developed a rigorous minimum variance technique for selecting and weighting comparables in real estate appraisal. This article extends Vandell's methodology in three areas: (1) an alternative objective function; (2) an approach that explicitly recognizes the non‐negativity constraint on comparable weights; and, (3) a more robust comparable inclusion process. Using Vandell's data, we show how our methodology modifies Vandell's results.