Inferential statistics, at its core, is concerned with making inferences about a population based on a sample drawn from that population. It involves analyzing sample data to draw conclusions about the broader population because the broader population is either too large to analyze, unknown, or hypothetical. While invaluable in many scientific disciplines and research contexts, […]
“A new valuation modeling paradigm” are the words used by the late Dr. Marv Wolverton. He is the author of the Appraisal Institute’s book on statistics for appraisers. He created the term in a response to my peer-reviewed Appraisal Journal article: “Common Statistical Errors and Mistakes: Valuation and Reliability.” The article itself can be summed […]
Evidence is shortly defined as “Something that shows proof.” It’s precisely defined in the law, and also addressed in philosophy and epistemology. Epistemology deals with methods, validity, and scope in the theory of knowledge. In the philosophy of science, evidence is what confirms (or not) your hypothesis. Evidence justifies belief, but only if respected. It […]
Yes, personal bias in appraisals can be eliminated. The appraisal ‘process’, in its current standard, is “loose.” It is not internally biased either way. But it is vulnerable to systemic human and analytic bias. It enables and conceals bias. It is vulnerable to attack — as being “too high” or “too low,” depending on the […]
EBV measures markets, rather than compares comps. In the traditional appraisal process, the appraiser ‘picks some comps’, then adjusts any differences in each comparable to the subject feature. In EBV (Evidence Based Valuation©), the analyst identifies all the competitive sales, then applies predictive algorithms. Which system is more USPAP compliant? Which system is more accurate? […]
Bias is a much used and misused word. Variance too has more than one meaning. Words rule. Words trigger our thoughts, our feelings, and our opinions. Bias itself can mean different things. It can mean different things to different people. And it can mean different things to the same person, depending on context. Bias can […]
Obsolete! Such a harsh word. Can it be? Is the problem convolution? Does it mean I will soon be obsolete? Not needed? Not loved? Terrible. What can be done? Yet all the little signs are pointing that way. “Automated” valuation models have much of the market, and continue to gain. Other valuation methods and appraisal […]
We talk a lot about data. The Good. The Bad. The Biased. And how wonderfully important information is. But what really matters? It can be easy to get lost in the mish-mash of talk about data. Let’s step back. Why do we care about this? We care because it is useful as an input to […]
Exploratory Data Analysis (EDA) is an implicit part of traditional appraisal. The appraiser invokes education, training, and market area familiarity to decide on comparables and adjustments to be made. The process takes place fully in the mind of a competent practitioner. EDA is expressed in quasi-governmental standards (USPAP) as a focus on the subject property’s: […]
Appraiser training tells us to use good judgment – repeatedly. In fact, the word ‘judgment’ is used over 300 times in the current USPAP book. It must be important. It’s also used some 800 times in The Appraisal of Real Estate. It must be important. The basis of appraisal theory in the United States is […]
Evidence is a necessary part of any research or analysis. In a prior blog, we considered that it was a core part of EBV (Evidence Based Valuation©). We noted three basic types (or ‘support’ for a personal opinion). We have logical – “if A, then B must follow”. We have empirical – “If A, then […]
Why should I care about statistical stuff? Appraisal says: Pick some comps, compare, reconcile, and give a number. No statistics there. Data science says let the market pick the data, predict, and provide a reliability score. Traditional appraisal and modern data science have the same goal: help make decisions by analyzing data. Statistical thinking is […]
“Ya gotta make this stuff simple” I am told . . . Data Science: Get the right data, clean the data, apply predictives, get results. Property analytics: Get the right data, clean it, apply predictives, get results. So let’s expand this: Step 1. Identify the problem, download all the data you will ever need. Step […]
The legacy vs the upstart? What is the one single big difference? The traditional appraisal process is accepted. The Data Science viewpoint is new. (John Tukey predicted the impact of computer power on data analysis as an empirical science – in 1962.) Traditional appraisal has a proven legacy: It focuses on property analysis – leading […]
Can we compare “statistical adjustment” methods to traditional appraisal adjustment practices? ‘Adjustment’ is mentioned only once in USPAP; (Standard 5 on mass appraisal). However, in The Appraisal of Real Estate, “adjust” comes up 687 times! It must be important. Surely, it’s clearly explained. In each use, the context is critical. It states: ‘Adjustment’ builds on […]