A Longitudinal Examination of the Appraisal Smoothing Hypothesis |
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Authors: | Julian Diaz III Marvin L. Wolverton |
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Affiliation: | Georgia State University, Atlanta, Georgia 30302-4020 or .;Washington State University, Pullman, WA 99146-4746 or . |
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Abstract: | Appraisal smoothing, the reduced variability of real estate return series, has been attributed to appraisers being influenced by their own previous value estimates. This hypothesis is tested experimentally. Expert apppraisers from Atlanta were asked to value a hypothetical apartment project in Phoenix. Eight months later, these experts were asked to update their original appraisals given certain market and property changes. At this time, an independent group of Atlanta experts was asked to appraise the property based on the updated conditions. Results support the hypothesis of insufficient adjustment from previous value judgments. |
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