Abstract
The aim of the paper is develo** an econometric model that may support the process of real estate mass appraisal. The research hypothesis assumes that a model with restrictions enables a more precise determination of the impact of real property attributes on the prices than an analogous model without restrictions. The so-called Szczecin algorithm of real estate mass appraisal serves as a starting point for the model determination. A unitary price of undeveloped land real properties designated for low-rise residential development constitutes an explained variable. A set of explanatory variables is comprised of the following real estate attributes: surface area, plot physical properties, utilities, transport availability, real estate neighbourhood. The impact of a location was considered through dummy variables adopted for city surveying sections. All the variables were introduced into the model taking into account the measurement scales best suited for each of them. Two types of restrictions, (1) non-negativity of an attribute impact and (2) monotonicity of an attribute impact, will be imposed on the model parameters. These restrictions refer to the parameters with variables (attributes) other than surface area, which is measured in m2. The procedure of estimation of a model with restrictions will be discussed. The model will be verified with the use of a real transaction database from the Szczecin real estate market concerning undeveloped land real estate designated for low-rise residential development.
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Acknowledgements
The article was financed from the resources of the National Science Centre in Poland within the framework of project No. 2017/25/B/HS4/01813.
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Doszyń, M. (2020). Inequality Restricted Least Squares (IRLS) Model of Real Estate Prices. In: Jajuga, K., Batóg, J., Walesiak, M. (eds) Classification and Data Analysis. SKAD 2019. Studies in Classification, Data Analysis, and Knowledge Organization. Springer, Cham. https://doi.org/10.1007/978-3-030-52348-0_6
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