CDR Seminar: Jim Freeman - "Real estate valuation: an SEM modelling approach"

Abstract

Though hedonic regression remains a popular technique for estimating property values, structural equation modelling (SEM) is increasingly seen as a realistic analysis alternative. The presentation concerns an SEM analysis of a historical dataset for a large Canadian realtor. An iterative approach was adopted for the modelling, the first phase focusing on internal relationships between houses’ structural characteristics and the second, on housing values and their determinants. In the final phase, advertised list prices and location details were prioritised. A comprehensive evaluation of the resulting holistic model reveals a wealth of significant structural relationships - particularly between house style, structure and attributes.

About the speaker

Jim Freeman is a Senior Lecturer in Statistics and Operational Research at Alliance Manchester Business School. His research interests embrace game theory, simulation and applied statistics. Co-author of the market-leading EMEA (European, Middle Eastern and African) version of the famous Cengage ‘Statistics for Business and Economics’ text he has contributed significantly to a wide variety of management, OR and statistics projects over the years, using techniques as diverse as AHP, change-point modelling, decision analysis, SEM, simulation, stochastic dynamic programming, text mining and ordinal and logistic regression.