Principles and Criteria for using Statistical Parametric Models and Conditional Models for Valuation of Multi-Component Real Estate

Adamczyk Tomasz (), Bieda Agnieszka () and Parzych Piotr ()
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Adamczyk Tomasz: AGH University of Science and Technology, Department of Geomatics
Bieda Agnieszka: AGH University of Science and Technology, Department of Geomatics
Parzych Piotr: AGH University of Science and Technology, Department of Geomatics

Real Estate Management and Valuation, 2019, vol. 27, issue 2, 33-43

Abstract: The complexity of multi-component real properties results from the possibility of identifying various components in legal, physical or functional terms. The possibility of distinguishing various functional elements of real properties, combined with the specificity resulting from their market properties, is problematic when applying the comparative approach to real estate valuation. In this case, the valuation procedure can be implemented using statistical models: the parametric model or the conditional one.This research paper demonstrates the construction of the parametric and conditional models taking into account the geometric and pricing attributes of multi-component real estate. The authors paid attention to adjusting the models to the available market data. They also specified the conditions for the use of statistical models in the real estate valuation process. Based on the analytical and accounting considerations, the estimation criteria for the parametric model and the conditional model were defined, which allow the correct application of these models at the stages of the real estate market analysis and the real estate valuation process.

Keywords: conditional model; parametric model; statistical models; real estate valuation; statistical analysis of the market; multi-component real estate (search for similar items in EconPapers)
JEL-codes: C00 C13 C19 C52 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:27:y:2019:i:2:p:33-43:n:3

DOI: 10.2478/remav-2019-0013

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