Book Summary
Making Valuation Modeling (AVM and CAMA) More Econometric is the definitive guide to transforming proprietary black-box valuation systems into transparent, statistically defensible models.
This book provides a systematic, step-by-step framework for achieving Best Linear Unbiased Estimator (BLUE) status for your valuation coefficients. You'll master the econometric discipline required to:
- Establish Structural Integrity: Use the Two-Pass Regression Approach and the Foundational/Conditional Variable Strategy to eliminate Omitted Variable Bias and ensure model stability.
- Generate Transparent Adjustments: Apply advanced Dummy, Effect, and One-Hot Coding to replace subjective heuristics with explicit, data-driven dollar adjustments for time and location.
- Prove Defensibility and Equity: Validate your model using industry-standard checks, including the Sales Representativeness Test and the IAAO Guidelines (COD & PRD), to prove high uniformity and fairness across value ranges.
This book is a call to action for mass appraisal professionals, AVM scientists, and risk managers to move beyond simple prediction and embrace the econometric imperative. It will help build models that are not only accurate but also equitable, transparent, and legally defensible.
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