Valuation Bias in Commercial Appraisal: A Transaction Price Feedback Experiment

Hansz, J; Díaz, Julián Ruiz

doi:10.1111/1080-8620.00022

Cited by 68 publications

(43 citation statements)

References 14 publications

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“…In a survey conducted by Wolverton and Gallimore (1999), appraisers responded that while they viewed their own role as estimating market value, they believed that clients (lenders) viewed the appraiser's role as validating a pending sale price. Hansz and diaz (2001) uncovered an asymmetric response to transaction price feedback. When appraisers were told that their value estimate on a previous appraisal was "too high" (regardless of whether it really was or not), appraisers did not adjust their next valuation on an unrelated assignment.…”

Section: Literature Review and Research Hypothesismentioning

confidence: 99%

A Taxonomic Field Investigation in to Induced Bias in Residential Real Estate Appraisals

Díaz

Hansz

2010

International Journal of Strategic Property Management

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ABstRACt.A taxonomic approach to field research was developed and utilized to support empirical and experimental research findings into the impact that incentives/pressures to overvalue have on systematic valuation bias. An expected no-bias population was defined and valuation judgments from actual, real-world appraisals were statistically tested against it. The judgments of appraisers presented with no incentive/pressure to over-value were consistent with the no-bias population, while the judgments of appraisers presented with incentive/pressure to over-value were significantly incompatible with the defined no bias population.

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Section: Literature Review and Research Hypothesismentioning

confidence: 99%

A Taxonomic Field Investigation in to Induced Bias in Residential Real Estate Appraisals

Díaz

Hansz

2010

International Journal of Strategic Property Management

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“…19 The database employs statistics provided by appraisal firms, as the real prices of housing transactions are not published in Spain. We are aware that our procedure presents certain weaknesses, including problems of bias (Dietrich, Harris, & MullerIII, 2000); dispersion (Hansz and Diaz-III, 2003); and econometrics (see Bond & Hwang, 2007, for a list of such problems associated with appraisals). However, our main concern is whether the appraisal firms use a territorially-biased method or procedure in their computations.…”

Section: Resultsmentioning

confidence: 99%

HouSI: Heuristic for delimitation of housing submarkets and price homogeneous areas

Royuela

Duque

2013

Computers, Environment and Urban Systems

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a b s t r a c tThis paper seeks to address the problem of the empirical identification of housing market segmentation, once we assume that submarkets exist. The typical difficulty in identifying housing submarkets when dealing with many locations is the vast number of potential solutions and, in such cases, the use of the Chow test for hedonic functions is not a practical solution. Here, we solve this problem by undertaking an identification process with a heuristic for spatially constrained clustering, the ''Housing Submarket Identifier'' (HouSI). The solution is applied to the housing market in the city of Barcelona (Spain), where we estimate a hedonic model for fifty thousand dwellings aggregated into ten groups. In order to determine the utility of the procedure we seek to verify whether the final solution provided by the heuristic is comparable with the division of the city into ten administrative districts.

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“…Hansz and Diaz III (2001) and Hansz (2004a) add that critical feedback on previous value assignments trigger US commercial valuers to provide more positive value estimates in subsequent (but unrelated) valuations assignments. Client size, transaction-related valuation assignments and lack of market transparency may also instigate value revision by general practice valuers in less mature real estate markets, such as Singapore, Taiwan and Nigeria (Amidu & Aluko, 2007a;Nwuba, Egwuatu, & Salawu, 2015b;Nwuba et al, 2015a), albeit not the case in residential settings (Amidu & Tajudeen Aluko, 2007b).…”

Section: Interpersonal Valuer Judgement Biasmentioning

confidence: 99%

Research bias in judgement bias studies – a systematic review of valuation judgement literature

Klamer

Gruis

2017

Journal of Property Research

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a faculty of economics and Management, hu university of applied sciences, utrecht, the netherlands; b faculty of humanities, utrecht university, utrecht, the netherlands; c faculty of education, hu university of applied sciences, utrecht, the netherlands; d faculty of architecture and the Built environment, Delft university of technology, Delft, the netherlands ABSTRACT Valuation judgement bias has been a research topic for several years due to its proclaimed effect on valuation accuracy. However, little is known on the emphasis of literature on judgement bias, with regard to, for instance, research methodologies, research context and robustness of research evidence. A synthesis of available research will establish consistency in the current knowledge base on valuer judgement, identify future research opportunities and support decision-making policy by educational and regulatory stakeholders how to cope with judgement bias. This article therefore, provides a systematic review of empirical research on real estate valuer judgement over the last 30 years. Based on a number of inclusion and exclusion criteria, we have systematically analysed 32 relevant papers on valuation judgement bias. Although we find some consistency in evidence, we also find the underlying research to be biased; the methodology adopted is dominated by a quantitative approach; research context is skewed by timing and origination; and research evidence seems fragmented and needs replication. In order to obtain a deeper understanding of valuation judgement processes and thus extend the current knowledge base, we advocate more use of qualitative research methods and scholars to adopt an interpretative paradigm when studying judgement behaviour.

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Valuation Bias in Commercial Appraisal: A Transaction Price Feedback Experiment

Cited by 68 publications

References 14 publications

A Taxonomic Field Investigation in to Induced Bias in Residential Real Estate Appraisals

A Taxonomic Field Investigation in to Induced Bias in Residential Real Estate Appraisals

HouSI: Heuristic for delimitation of housing submarkets and price homogeneous areas

Research bias in judgement bias studies – a systematic review of valuation judgement literature

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