Real Estate Appraisal: A Double Perspective Data Envelopment Analysis Approach

Abstract

This paper proposes a new methodology for the assessment of the value range for real estate units. The theoretical basis of the methodology is built on the Data Envelopment Analysis-DEA approach, which has its original concept adapted to the case where the units under assessment consist of transactions among sellers and buyers. The proposed approach-christened Double Perspective-Data Envelopment Analysis (DP-DEA)-is applied to a database comprising the prices and features of the units under assessment. It is shown that the DP-DEA presents some specific advantages when compared to the usual regression analysis method employed in real estate value assessment.

Avaliação de processos licitatórios de embarcações de apoio marítimo offshore com utilização de análise envoltória de dados

“…Pode-se igualmente afirmar que as DMUs pertencentes à fronteira invertida têm as melhores práticas sob uma ótica oposta (Lins et al, 2005).…”

Lift ticket prices and quality in French ski resorts: Insights from a non-parametric analysis

“…This method was originally proposed by Lins et al (2005) to the case of real estate value assessment. The double perspective DEA framework combines the maximization of outputs and the minimization of inputs in a setting where inputs under one perspective are the outputs under the other perspective (and vice-versa).…”

Cost-benefit analysis in selected air trips using a non parametric method

“…As DEA is a very benevolent measurement that evaluates each unit for whatever it does best, a discrimination enhancing technique in DEA was required (Adler et al, 2002;Angulo-Meza and Lins, 2002;Podinovski and Thanassoulis, 2007;Soares de Mello et al, 2008). One of the techniques to distinguish between large numbers of efficient DMUs is the concept of Inverted Frontier introduced by Yamada et al (1994), Lins et al (2005). This method consists of inverting inputs for outputs and vice-versa.…”

“…The second is that those DMUs have the best practices from the opposite viewpoint. In other words, the original frontier can be seen as the seller's point of view, while the Inverted Frontier is the buyer's (Lins et al, 2005). A DMU evaluation index, which will be named "combined efficiency", can be defined to involve the standard efficiency as much as the inverted one.…”