Accounting for locational, temporal, and physical similarity of residential sales in mass appraisal modeling: the development and application of geographically, temporally, and characteristically weighted regression

Paul Bidanset, Michael McCord, John A Lombard, Peadar Davis, William McCluskey

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Abstract

Geographically weighted regression (GWR) has been recognized in the assessment community as a viable automated valuation model (AVM) to help overcome, at least in part, modeling hurdles associated with location, such as spatial heterogeneity and spatial autocorrelation of error terms. Although previous researchers have adjusted the GWR weights matrix to also weight by time of sale or by structural similarity of properties in AVMs, the research described in this paper is the first that has done so by all three dimensions (i.e., location, structural similarity, and time of sale) simultaneously. Using 24 years of single-family residential sales in Fairfax, Virginia, we created a new locally weighted regression (LWR) AVM called geographically, temporally, and characteristically weighted regression (GTCWR) and compared it with GWR-based models with fewer weighting dimensions.
Original languageEnglish
Pages (from-to)5-13
Number of pages7
JournalJournal of Property Tax Assessment and Administration
Volume14
Issue number2
Early online date8 Jan 2018
Publication statusE-pub ahead of print - 8 Jan 2018

Keywords

  • Property Tax Assessment
  • Spatial Analysis
  • Geographically Weighted Regression
  • AVM
  • CAMA

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