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| A Note on the Optimal Selection and Weighting
of Comparable Properties Author: Donald R. Epley Start Page: 175 Abstract: This paper reexamines
the recommendation by Vandell (1991), Gau, Lai and Wang (1992, 1994) and Green (1994) for
the use of the minimum variance and coefficient of variation criteria in the optimum
selection of comparables. These authors under-emphasize the typical valuation scenario
that involves extremely small samples. The analyst must rank the few available comparable
properties and select the "best" to carry the most weight in the final estimate
of value. Rank transformation regression is suggested as one approach that can be used to
extract the buying trend. The commonly taught paired-sale analysis will remain as the
industry tool until more accurate estimates of value are developed with small samples. |
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