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The use of appraisals in portfolio valuation and index construction

David Geltner (University of Cincinnati, College of Business Administration, Department of Finance, Cincinnati, Ohio, USA)

Journal of Property Valuation and Investment

ISSN: 0960-2712

Article publication date: 1 December 1997

Abstract

Provides a review of basic appraisal and statistical principles combined with a simple numerical simulation. Suggests two main directions in which the appraisal profession should move. First, because public stock exchanges tend to be more informationally efficient than private property markets, appraisal accuracy can be improved by making increased quantitative use of the information in the share prices of publicly‐traded property companies. Second, it must be recognized that the valuation techniques which are optimal for individual property appraisal are suboptimal for the mass appraisal of aggregate portfolios or indexes of property market values. Suggests that regression‐based techniques based purely on transaction prices may be superior for this latter function.

Keywords

Citation

Geltner, D. (1997), "The use of appraisals in portfolio valuation and index construction", Journal of Property Valuation and Investment, Vol. 15 No. 5, pp. 423-447. https://doi.org/10.1108/14635789710189191

Publisher

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MCB UP Ltd

Copyright © 1997, MCB UP Limited