Measurement of entropy in the assessment of homogeneity of areas valued with the Szczecin Algorithm of Real Estate Mass Appraisal

Abstract

Aim/purpose – General real estate taxation is a process regulated, inter alia, by the Real Estate Management Act. It is intended to establish a tax base for real estate in the event of a change in real estate tax base. General taxation is one of several applications of mass valuation of real estate, which enables valuation of many properties at the same time and with a uniform approach. One of the methods of mass valuation of real estate already applied in practice is the Szczecin Algorithm of Real Estate of Mass Appraisal (SAREMA). One of the immanent features of general taxation and the algorithm itself is the division of a selected area into possibly homogeneous areas called taxing zones within the general taxation terminology and, more broadly, elementary areas, according to the nomenclature used in the SAREMA. The paper presents the results of the studies on the measurement of elementary areas homogeneity on the example of land plots located in Szczecin. It is important to assess whether the designated sub-areas of valuation cover properties similar to each other in terms of their specific characteristics. If so, it will help to obtain more accurate mass valuation results.

Keywords

• property mass valuation
• entropy
• property market analysis
• c51
• r52