Considerations in the Design and Construction of Investment Real Estate Research Indices

34 Pages Posted: 13 Dec 2006  

David Geltner

Massachusetts Institute of Technology (MIT); MIT Center for Real Estate

David C. Ling

University of Florida - Warrington College of Business Administration

Abstract

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.

Keywords: real estate indices, appraisal, transactions, indices

JEL Classification: C35, C42, C43, C44, C51, C52, C53, R11, R14, R15

Suggested Citation

Geltner, David and Ling, David C., Considerations in the Design and Construction of Investment Real Estate Research Indices. Journal of Real Estate Research, Vol. 28, No. 4, 2006 . Available at SSRN: https://ssrn.com/abstract=951466

David Geltner (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

MIT Center for Real Estate ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

David Curtis Ling

University of Florida - Warrington College of Business Administration ( email )

P.O. Box 117168
Gainesville, FL 32611
United States
352-392-9307 (Phone)
352-392-0301 (Fax)

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