Does my house have a premium or discount in relation to my neighbors? A regression-kriging approach

Abstract

In the real estate literature, numerous studies have applied hedonic models to estimate the implicit value of the characteristics that influence housing prices. However, few studies have quantified the weight of location in the price of residential properties,and still fewer have quantified the premium or discount used to weigh the price of a home. In this paper, the regression-kriging method is applied to address the two previous objectives in the city of Granada, Spain. This method is also adapted, interpreted and made accessible to real estate appraisers with a view to providing these professionals with an objective, sophisticated and powerful tool in accordance with their know-how.This method can also be useful for investors, urban planners, public administrators and revenue departments, among others, as it can determine the value distribution of the location.