Integrating stated preference methods for property valuations in housing markets: An experimental case study in Italy
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 3 April 2019
Issue publication date: 11 June 2019
Abstract
Purpose
The study aims to propose an appraisal procedure based on the preferences stated by a sample of potential consumers and producers which makes it possible to obtain the hypothetical demand and supply curves and to estimate the most likely market value and transaction quantities for housing markets with unrevealed prices.
Design/methodology/approach
The procedure is divided into two steps: the first is aimed at selecting the alternatives that are most likely to meet the market’s preference by applying discrete choice (DC) analysis; the second makes it possible to estimate the potential demand and supply curves for the preferable alternatives singled out through DC analysis by using contingent valuation methods.
Findings
The results obtained considering only the hypothetical demand or the hypothetical supply differ by an average of 10 per cent from the actual sale price. Conversely, the values detected as the intersection of the hypothetical demand curve and the hypothetical supply curve, fall into variation margins that can be considered fully acceptable in real estate appraisal
Originality/value
As opposed to the applications performed in international real estate operations where reference is made solely to the potential demand estimate, the described procedure estimates the transaction value as the intersection between the hypothetical demand and supply curves, for the purposes of keeping account of the conditions that generally occur in the real market. Furthermore, it is possible to detect the incidence of the characteristics in market price formation, and to identify the market share of possible alternative assets and estimate the optimal quantity to be produced.
Keywords
Citation
Miccoli, S., Finucci, F. and Murro, R. (2020), "Integrating stated preference methods for property valuations in housing markets: An experimental case study in Italy", International Journal of Housing Markets and Analysis, Vol. 12 No. 3, pp. 474-486. https://doi.org/10.1108/IJHMA-02-2018-0019
Publisher
:Emerald Publishing Limited
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