Municipal Non-Residential Real Property Valuation Forecast Accuracy

K. Nicole Arnold Cote, Wm. Doyle Smith and Thomas Fullerton ()

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this study is to estimate the accuracy and/or reliability of alternative methods of forecasting property valuations of non-residential real commercial and industrial property in El Paso to improve municipal revenue forecasting. This study seeks to identify and evaluate four econometric and statistical alternatives to present forecasting practices for nonresidential property valuation forecasts: (1) a traditional income elasticity method, (2) a regional structural econometric model, (3) a statistical ARIMA method, and (4) trend analysis. In order to evaluate the four models, ex ante forecast simulations are created for each modeling approach and then compared to random walk and random walk with drift models for both commercial and industrial property values. Results indicate that the random walk with drift model outperformed all four models for both commercial and industrial property values. In addition, results also indicate that the random walk model outperformed all four models for industrial property values.

Keywords: Non-residential property valuation forecasts; regional economics; applied econometrics (search for similar items in EconPapers)
JEL-codes: C53 H71 (search for similar items in EconPapers)
Date: 2010-10-22, Revised 2011-02-11
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Citations: View citations in EconPapers (1)

Published in International Journal of Business & Economics Perspectives 1.6(2011): pp. 56-77

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:32116

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