Market difference and test models of real estate assessment equity - Evidence from existing residential transactions

It is usually very diffcult to appraisal real estate’s value because the price’s fluctuation and market difference. This paper researches the effect and applicability for the nine assessment equity test models that are very popular in real estate appraisal. Ratio, vertical and horizontal inequities are tested by spatial econometrics based on market difference and high-density communities. It is found that spatial econometrics methods could reduced effectively inequities, especially for vertical inequity. Relative to horizontal inequity test results, both two spatial econometrics methods are better in vertical inequity test. Concretely speaking, SAR (spatial autoregressive model) models are better than SEM (spatial error model) models. The regressive effects of vertical inequity are verified for PF, Cheng, IAAO, Bell, Sunderman and Chapp test models. Moreover, AD model are more effective than Goolsby model for assessment equity test in high-density area. This paper provides micro evidence to improve the accuracy in real estate assessment.