| Abstract: | Numerous econometric models have used various estimates of housing value as dependent variables. The three most common measures, in order of descending popularity, have been homeowner estimates, sales price, and assessed value. Each of these measures has limitations. The use of sales price can cause sample selection bias, while owner and tax assessor estimates are subject to measurement error. This study investigates the magnitude of the selection bias associated with sales price samples, and whether the errors in owner and assessor estimates are systematically related to independent variables typically included in estimated equations. Our most important conclusion is that the use of owner estimates may cause bias in the estimated coefficients on many independent variables. |
