MEASUREMENTS OF RATIONALITY FOR ASCIENTIFIC APPROACH TO THE MARKET-ORIENTED METHODS

Appraisals are based on regression models. Its major application limits are all insituations in which the real estate market doesn’t offer a sufficient number ofcomparables to implement statistical tools. In low-transaction real estate markets, themost effective appraisal method is the market comparison approach (MCA). Theapplication limits of MCA depend on the degree of similarity between the properties’characteristics and the reliability of the prices of comparables. In this paper, weintroduce some rational measurements in order to guarantee a scientific approach toMCA is associated with the correct prices. Our method is able to restore appraisalsof the market value of any type of property, even in situations in which thecomparables are limited or when the reliability of the buying and selling prices couldbe better.