 Hedonic, residual, and matching methods for residential land valuationSteven Bourassa and Martin Hoesli Journal of Housing Economics, 2022, vol. 58, issue PA Abstract: Accurate estimates of land values on a property-by-property basis are an important requirement for the effective implementation of land-based property taxes. We compare hedonic, residual, and matching techniques for mass appraisal of residential land values, using data from Maricopa County, Arizona. The first method involves a hedonic valuation model estimated for transactions of vacant lots. The second approach subtracts the depreciated cost of improvements from the value of improved properties to obtain land value as a residual. The third approach matches the sales of vacant lots with subsequent sales of the same properties once they have been developed. For each pair, we use a land price index to inflate the land price to the time of the improved property transaction and then calculate land leverage (the ratio of land to total property value). A hedonic model is estimated and used to predict land leverage for all improved properties. We conclude that the matching approach is the most promising of the methods considered. Keywords: Land valuation; Hedonic method; Residual approach; Land leverage; Matching approach (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:58:y:2022:i:pa:s1051137722000420 DOI: 10.1016/j.jhe.2022.101870 Access Statistics for this article Journal of Housing Economics is currently edited by H. O. Pollakowski More articles in Journal of Housing Economics from Elsevier |
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