THE APPLICATION OF MULTIPLE REGRESSION ANALYSIS IN PROPERTY VALUATION

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Abstract
The adoption of statistical methods of analysis by British valuers has been, at the best, rather piece‐meal. This paper highlights the contrasting application of multiple regression analysis (MRA) within valuation practice in the USA relative to that in the UK and emphasises the need for suitable databases. Historically the valuer in the UK has lacked access to databases. The analyses presented in this paper indicate that, even if databases exist, factors such as statistical variability, heterogeneity, geographical scale and sample size may influence both the explanatory and predictive powers of the MRA model. Nevertheless the estimation of value from the objectivity of the MRA model can assist the valuer by supporting opinion or highlighting circumstances where re‐appraisal is necessary.

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