Considerations in the Design and Construction of Investment Real Estate Research Indices
MIT Center for Real Estate; Massachusetts Institute of Technology (MIT)
David C. Ling
University of Florida - Warrington College of Business Administration
Journal of Real Estate Research, Vol. 28, No. 4, 2006
This paper surveys some of the major technical issues in the design and construction of real estate research indices, both appraisal-based and transactions-based. The paper considers property sampling issues, differences between transaction prices, market values, and appraised values, the trade-off between random measurement error and temporal lag bias, optimal reporting and property revaluation frequencies, and the uses and limitations of modern statistical techniques. Although one of the conclusions of the analysis is that most research questions are best addressed with transactions-based, rather than appraisal-based, indices in the United States, the paper suggests how appraisal-based indices can still be useful for some research purposes.
Number of Pages in PDF File: 34
Keywords: real estate indices, appraisal, transactions, indices
JEL Classification: C35, C42, C43, C44, C51, C52, C53, R11, R14, R15Accepted Paper Series
Date posted: December 13, 2006
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