The comparable sales method as the basis for a property tax valuations system and its relationship and comparison to geostatistical valuation models

The comparable sales method as the basis for a property tax valuations system and its relationship and comparison to geostatistical valuation models

Borst, R.A.

2006-10-30

There is an identifiable theoretical relationship between the comparable sales method (CSM) of valuation as practiced by mass appraisers and the recent developments in geostatistical valuation models. The CSM is shown to be a special case of a spatially lagged weight matrix model. There is a less formal but clear relationship with Geographically Weighted Regression as well. The predictive accuracy of CSM is compared to several Ordinary Least Squares Model configurations, and results obtained from Geographically Weighted Regression via empirical studies on diverse datasets. An example of a comparable sales weighting scheme as practiced by mass appraisers is provided. In addition, particular interest is focused on how well each method is able to model the spatial variations in property values. This is done by examining the local and global spatial autocorrelation in residual errors of the predicted values.

comparable sales, geostatistical, spatial autocorrelation, weight matrix

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Conference proceedings

conference paper

(c) 2006 Borst, R.A.