Textual Analysis in Real Estate

Adam Nowak and Patrick Smith
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Adam Nowak: West Virginia University, Department of Economics
Patrick Smith: Georgia State University, J. Mack Robinson College of Business

No 15-34, Working Papers from Department of Economics, West Virginia University

Abstract: This paper incorporates text data from MLS listings from Atlanta, GA into a hedonic pricing model. Text is found to decrease pricing error by more than 25%. Information from text is incorporated into a linear model using a tokenization approach. By doing so, the implicit prices for various words and phrases are estimated. The estimation focuses on simultaneous variable selection and estimation for linear models in the presence of a large number of variables. The LASSO procedure and variants are shown to outperform least-squares in out-of-sample testing.

Keywords: textual analysis; big data; real estate valuation (search for similar items in EconPapers)
JEL-codes: C01 C18 C51 C52 C55 C65 R30 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2015-08
New Economics Papers: this item is included in nep-ecm, nep-for and nep-ure
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