An estimative model of Automated Valuation Method in Italy.

Marco Simonotti, Marina Ciuna, Francesca Salvo

    Research output: Chapter in Book/Report/Conference proceedingChapter

    3 Citations (Scopus)

    Abstract

    The Automated Valuation Method (AVM) is a computer software program that analyzes data usingan automated process. It is related to the process of appraising an universe of real estate properties,using common data and standard appraisal methodologies. Generally, the AVM is based onquantitative models (statistical, mathematical, econometric, etc.), related to the valuation of theproperties gathered in homogeneous groups (by use and location) for which are collected samplesof market data. The real estate data are collected regularly and systematically. Within the AVM, theproposed valuation scheme is an uniequational model to value properties in terms of widespreadavailability of sample data, allowing the use of statistical models, and in the opposite conditions ofthe absence of data of comparable properties. Under these conditions the ‘appraisal model’ has aunique shape, when its coefficients are calculated with a mathematical-statistical model and whenthey are determined by an estimative process. The main part of the appraisal model is unique andthe universal in the valuation, for which the mathematical-statistical and estimative procedures arethe underlying part. Of course, the accuracy of the valuation increases with the number of availabledata, other conditions being equal, and the valuations, carried out in the absence of data (but in thepresence of other market information), require extra-statistical appraisal procedures involving acomplete knowledge of the real estate market (Ciuna and Simonotti 2011). However suchknowledge is also required in the AVM performed by quantitative models with regard to the datasampling and the verify of the results (Kauko, T., & d’Amato, M. 2008a & b). The appraisal modelis based on uniequational ‘appraisal functions’, on indices measured in the market and on tests. Infirst approximation, the linear form is preferred for simplicity, for the modularity (the majority ofmodels are linear or linearized or attributable to additive forms), for the understanding of thecalculations, the intermediate elements (e.g. marginal prices of the real estate characteristics) andthe results of the valuation.
    Original languageEnglish
    Title of host publicationAdvances in Automated Valuation Modeling AVM After the Non-Agency Mortgage Crisis
    Pages85-112
    Number of pages28
    Publication statusPublished - 2017

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    All Science Journal Classification (ASJC) codes

    • Computer Science (miscellaneous)
    • Control and Systems Engineering
    • Automotive Engineering
    • Social Sciences (miscellaneous)
    • Economics, Econometrics and Finance (miscellaneous)
    • Control and Optimization
    • Decision Sciences (miscellaneous)

    Cite this

    Simonotti, M., Ciuna, M., & Salvo, F. (2017). An estimative model of Automated Valuation Method in Italy. In Advances in Automated Valuation Modeling AVM After the Non-Agency Mortgage Crisis (pp. 85-112)