Response Errors in Estimating the Value of Homes

The reliability of self-reported home values in a developing country context

“…This suggests that people who live in very low-value homes tend to grossly overestimate the value of their home, while those who live in more expensive homes have much smaller biases. Although this is quite different from what was documented in Kish and Lansing (1954), who find a close-to-zero bias for every group of appraised value, Martinelli and Parker (2009) point out that a small amount of misreporting may be due to embarrassment about the low value of the house.…”

“…In Kish and Lansing (1954), homeowners were asked to estimate the market value of their houses. Consequently, estimates for the same homes were made by professional appraisers.…”

“…For example, Kish and Lansing (1954) and Kain and Quigley (1972), respectively, report that only 6% and 12% of the respondents in their sample assessed their home value to be less than 70% of the appraised one. Meanwhile, 9% and 8% estimated it to be larger than 150% of the appraised value, and 26% and 37% had an estimate within 90-109% of the real estate agent's estimate.…”

Home price beliefs: Evidence from Australia

“…We find evidence that valuation differences are positively associated with spending, leverage and the allocation of 1 For example, Kish and Lansing (1954) and Kain and Quigley (1972).…”

Response Variance and its Estimation

“…Also the standard deviation of (n-l)/n (Cm-Fm) is generally greater than that of the estimate in the third row (2n-l)/2n (L--R). 6 In the ninth row estimates of the index of inconsistency (47) are exhibited. UR1 and us1 are estimated by the entries in the first and sixth rows, respectively.…”