ESG considerations for Automatic Valuation Models

Dimitris Karlis, Michalis Doumpos, Dimitrios Papastamos and Ilias Liapikos

ERES from European Real Estate Society (ERES)

Abstract: Environmental, Social, and Governance (ESG) considerations are playing an increasingly significant role in real estate, influencing various aspects of the industry. This talk focuses on the impact of ESG factors—primarily environmental and social (ES) rather than governance (G)—on property valuation, particularly in the context of automated valuation models (AVMs). The scope of the research is twofold. Initially, we propose the development of an ESG index/score for properties, incorporating relevant characteristics, and explore how this score can be use into AVMs. The score takes into account property specific characteristics related to environmental factors but also social characteristics mostly related to the location of the property. Our findings suggest that ESG score positively influences the predictive accuracy of AVMs, indicating that the market indeed accounts for these aspects while considering property pricing. Additionally, we examine alternative proxies for environmental characteristics in valuation, such as the Environmental Performance Certificate, which is becoming increasingly relevant in recent years. Real data from a financial institution in Greece are used to demonstrate the methodology

Keywords: automatic valuation; econometric models; environmental and social; Enviuronment (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2025-01-01
New Economics Papers: this item is included in nep-env and nep-eur
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/oai-eres-id-eres2025-282 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2025_282

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().