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Comparing the Accuracy of the Minimum‐Variance Grid Method to Multiple Regression in Appraised Value Estimates
Author(s) -
Lai TsongYue,
Wang Ko
Publication year - 1996
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 - 10.1111/1540-6229.00703
Subject(s) - estimator , statistics , variance (accounting) , minimum variance unbiased estimator , confidence interval , econometrics , bias of an estimator , mathematics , regression analysis , regression , value (mathematics) , grid , standard error , economics , geometry , accounting
The adjustment‐grid method and the multiple‐regression method are the two most frequently used techniques in the sales comparison approach. This paper demonstrates that although both techniques provide unbiased estimators, the minimum‐variance grid estimator should result in a smaller standard deviation than the multiple‐regression estimator. A technique is also derived to estimate the confidence interval or to perform hypothesis tests for the minimum‐variance grid estimator.