An Evaluation of Alternative Estimation Techniques and Functional Forms in Developing Statistical Appraisal Models

Han Bin Kang () and Alan K. Reichert
Additional contact information
Han Bin Kang: Department of Finance and Law Illinois State University Normal, Illlinois 61761, http://gilbreth.cob.ilstu.edu/fil/
Alan K. Reichert: Department of Finance and Law Illinois State University Normal, Illlinois 61761, http://gilbreth.cob.ilstu.edu/fil/

Journal of Real Estate Research, 1987, vol. 2, issue 1, 1-29

Abstract: This paper examines the combined effects of multicollinearity, parameter stability, and alternative function forms in hedonic regression models. The results indicate that the significance and stability of the regression coefficients as well as prediction accuracy are sensitive to the choice of functional form and estimation technique. In certain respects nonlinear models proved to be more effective than linear models and ridge regression techniques were generally superior to OLS estimation. Since no single estimation technique or functional form was superior in all respects, the appraiser may have to choose between minimizing the average prediction error or maximizing prediction stability.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1987
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://pages.jh.edu/jrer/papers/pdf/past/vol02n01/v02p001.pdf Full text (application/pdf)

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:jre:issued:v:2:n:1:1987:p:1-29

Ordering information: This journal article can be ordered from
Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
http://pages.jh.edu/jrer/about/get.htm

Access Statistics for this article

Journal of Real Estate Research is currently edited by Dr. Ko Wang

More articles in Journal of Real Estate Research from American Real Estate Society American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323.
Bibliographic data for series maintained by JRER Graduate Assistant/Webmaster ().