Econometric Identification of the Impact of Real Estate Characteristics Based on Predictive and Studentized Residuals

Abstract

The paper proposes a means of determining the impact of real estate characteristics based on the residuals of an accordingly specified econometric model. The econometric model contains explanatory variables whose values are easily measurable. Then, the hypothesis that the residuals of the econometric model encompass the impact of specific factors indicating that the real estate is atypical is verified, thus supporting real estate market analysis. The work describes various types of residuals (predictive and studentized residuals).

Keywords

• identification of specific (unobserved) factors
• predictive and studentized residuals
• econometric analysis of real estate market