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| Smoothing Bias in In-House
Appraisal-Based Returns of Open-End Real Estate Funds Author: Dirk P.M. De Wit Start Page: 157 Abstract: Appraisal-based real
estate return series often exhibit little variation, which is referred to as smoothing
bias. This paper discriminates between in-house and outside appraisals as sources of
smoothing bias in appraisal-based returns. There is reason to expect that in-house
appraisal-based returns of open-end real estate funds are smoothed. For a large open-end
real estate fund listed at the Amsterdam Stock Exchange, an unusually detailed set of data
is available, including observations of both in-house and outside appraisals. The
empirical findings suggest that in-house appraisal-based returns are smoothed, whereas
those based on independent outside appraisals are not. |
