In standard Computer-Assisted Mass Appraisal (CAMA)—especially in valuations delivered by third-party consultants—diagnostic testing rarely goes beyond a basic R-squared check and a high-level ratio study.
Assessors and junior analysts often receive opaque, black-box models with no visibility into whether they
meet classical econometric assumptions. When a high-stakes Value
Adjustment Board (VAB) hearing or courtroom challenge rolls around, that lack
of proof leaves jurisdictions dangerously exposed.
True model defensibility requires
looking under the hood.
This Wednesday, Session 7 of our
Mass Appraisal Masterclass drops on Substack. We are cutting through the
academic noise to show new analysts and practitioners how to run a practical,
transparent diagnostic battery using a single representative town model.
Here is a sneak peek at what we cover:
·
Linearity
& Zero Conditional Mean: Verifying absolute residual symmetry without
getting lost in matrix math.
·
Homoscedasticity
via RCV: Tracking
relative error dispersion across value deciles using the Residual Coefficient
of Variation.
·
Normality: Swapping out sensitive statistical
tests for intuitive sales ratio skewness and kurtosis.
·
Multicollinearity: Running targeted auxiliary
regressions to keep VIFs well below standard safety thresholds.
·
Catching
OVB: Spotting Omitted
Variable Bias in auxiliary outputs and knowing when to deploy hybrid Regression
Comps.
Stop relying on unverified black-box
models. Master the four foundational OLS tests and build valuation rolls that
stand up to any challenge.
Catch Session 7 on
Substack this Wednesday!