| The Journal of Real Estate Finance and Economics | |
| Volume 18, Issue 2, Article 1 (Abstract) | |
| Title: | Evaluating Real Estate Valuation Systems |
| Author: | Robert J. Shiller and Allan N. Weiss |
| Abstract: | A framework for comparing real estate valuation systems (including comparing purely statistical valuation systems with current appraisal methods) is proposed. The Density Estimation and Profit Simulation (DEPS) Method measures quality of a valuation system by simulating benefits to the mortgage lender who uses this method in mortgage underwriting to limit mortgage portfolio losses due to default. Related simple measures relevant to the selection of a valuation system are also discussed: dkewness of the distribution of errors, correlation of valuation errors with current selling price errors, correlation of errors of the valuation system with errors of valutation systems used by competing mortgage lenders, and other measures. |
| Keywords: | appraisal, accuracy, mortgage, default, foreclosure, Density Estimation and Profit Simulation (DePS) Method |