A Taxonomic Field Investigation into Induced Bias in Residential Real Estate Appraisals

26 Pages Posted: 26 Mar 2010

See all articles by Julian Diaz

Julian Diaz

Georgia State University

J. Andrew Hansz

E.V. Williams Center for Real Estate

Date Written: March 19, 2009

Abstract

A taxonomic approach to field research was developed and utilized to support empirical and experimental research findings into the impact that incentives/pressures to over-value have on systematic valuation bias. An expected no-bias population was defined and valuation judgments from actual, real-world appraisals were statistically tested against it. The judgments of appraisers presented with no incentive/pressure to over-value were consistent with the no-bias population, while the judgments of appraisers presented with incentive/pressure to over-value were significantly incompatible with the defined no bias population.

Keywords: real estate appraisal, mortgage lending, valuation judgment, default risk, client-agent impacts, Liquidity Crisis of 2008

JEL Classification: R00, G12, C12, C52, C93

Suggested Citation

Diaz, Julian and Hansz, J. Andrew, A Taxonomic Field Investigation into Induced Bias in Residential Real Estate Appraisals (March 19, 2009). Available at SSRN: https://ssrn.com/abstract=1575015 or http://dx.doi.org/10.2139/ssrn.1575015

Julian Diaz (Contact Author)

Georgia State University ( email )

P.O. Box 4020
Atlanta, GA 30303-4020
United States
404-651-2760 (Phone)
404-651-3396 (Fax)

J. Andrew Hansz

E.V. Williams Center for Real Estate ( email )

Norfolk, VA 23529-0222
United States
7576833505 (Phone)

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