A Connection between Paired Data Analysis and Regression Analysis for Estimating Sales Adjustments

The two methods most often recommended for obtaining market-derived adjustments utilized in the sales comparison approach to appraisal are Paired Data Analysis and Multiple Regression Analysis. These approaches are viewed as competing alternatives, with advocates and detractors for each. The main pu...

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Bibliographic Details
Published in:The Journal of real estate research 1995-01, Vol.10 (2), p.175-183
Main Authors: Lipscomb, Joseph B., Gray, J. Brian
Format: Article
Language:English
Subjects:
Advantages
Data analysis
Datasets
Disadvantages
Equivalence relation
Estimating techniques
Estimation methods
Methods
Observational research
Price level changes
Real estate appraisal
Real estate sales
Regression analysis
Regression coefficients
Sales
Statistical models
Studies
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Summary:The two methods most often recommended for obtaining market-derived adjustments utilized in the sales comparison approach to appraisal are Paired Data Analysis and Multiple Regression Analysis. These approaches are viewed as competing alternatives, with advocates and detractors for each. The main purpose of this paper is to demonstrate that these two alternatives to estimating sales adjustments are equivalent under certain circumstances. This point of equivalence may prove to be a useful starting place for improving our understanding of the differences between and similarities of the two methods. After explaining the data requirements of each method, we provide a set of sufficient conditions under which the two methods produce identical adjustment estimates. We finish with a discussion of the relative advantages and disadvantages of these two methods in estimating sale comparison adjustments.
ISSN:0896-5803
2691-1175
DOI:10.1080/10835547.1995.12090781