Principle of Substitution, ....

[Joe Flacco]

My original question...how do you measure reliability?

The only way would be to do a valuation and then see what it lists and sells for.

 

[TerryRohrer]

The only way would be to do a valuation and then see what it lists and sells for.

In other words, your claims about reliability are meaningless drivel intended to mislead. And, regarding your example above, why would an appraisal be necessary? There is no challenge or thought necessary when there are hundreds of comparables with only minor differences. If that is your typical, and you think there is any challenge in that scenario, you wouldn't even be able to begin an assignment in 90% of the areas I deal with.

 

[RCA]

Yes, exactly. You analyze only 20 or so number of variables and then pretend there are no other variables. According to Terry, the number of variables is countless. He is correct.

I don't have any idea where you get that I ever said that I was ignoring variables - or what point you are trying to make. You are mixed up about something or another.

You certainly don't understand what residuals are.

I don't pretend there are "no other variables." I have been working with this data for 20 years. I know which fields are usable and which are not. MARS will determine if a field you enter has any significant relevance or not. In many cases Field F2 is highly collinear with another Field F1, so you don't want to use both fields, one will do. Some fields actually identify the property - so you can't use them because they would cause overfitting. Fields that have good and highly reliable measures are very precious - and are invariably used.

Let's be very clear - there are many variables - but most of them don't have any measures. However, we do measure their total impact on value as a group through the residual. That is, the residual reflects the impact on value of all other variables that you don't input into the regression. Isn't that nice? We, therefore, do in fact capture the impact of EVERY variable that affects value.

That is the power of the residual.

Get your act together - give it some more thought. Maybe you will figure it out. There is always hope.

 

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[RCA]

Eventually, the Residual Constraint Approach will dominate residential appraisal - it just needs more programmatic support to reduce the time required to do the appraisal, and generate the report, including forms.

However, there will be spin-offs from developing this method. So, those who are smart, - would be well advised to pay attention.

I recommend that development for appraisal be kept Open Source. Entrepreneurs can make spin-offs for other areas such as Financial Risk - where turn-around times are much shorter - and consequently, profits are easier to come by.

 

[Artemis Fowl]

Eventually, the Residual Constraint Approach will dominate residential appraisal - it just needs more programmatic support to reduce the time required to do the appraisal, and generate the report, including forms.

However, there will be spin-offs from developing this method. So, those who are smart, - would be well advised to pay attention.

I recommend that development for appraisal be kept Open Source. Entrepreneurs can make spin-offs for other areas such as Financial Risk - where turn-around times are much shorter - and consequently, profits are easier to come by.

So who else is using your method?