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Using Multi Level Modeling Techniques as an AVM Tool: Isolating the Effects of Earthquake Risk from Other Price Determinants

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Advances in Automated Valuation Modeling

Part of the book series: Studies in Systems, Decision and Control ((SSDC,volume 86))

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Abstract

Automated valuation methods employ diverse methodologies. The appropriateness of the individual model is contingent upon the characteristics of the housing market in question. In circumstances where the housing market is spatially variegated and data is sparse, distinguishing impacts of an environmental event or externality on different spatial segments of the market is challenging. A multi-level model provides one possible approach. Here we apply the model to explore the impact of a natural disaster on the housing market in Istanbul, a city located in a region with relatively frequent seismic activity. The Chapter provides a relatively simple exemplar of the method and its utility. Two levels of influence emerge. We distinguish between the citywide and segmented neighbourhood impact of earthquakes on house prices. Appraisers working in segmented markets where the potential for natural disasters occur might consider the methodological advantages of using multi-level modeling to help isolate both the effects of the risk of damage and also to discern the spatial variations in such effects. Furthermore we contend that there is considerable scope to expand the modelling approach to take account of different levels.

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Authors and Affiliations

  1. University of Liverpool, Liverpool, UK

    Richard Dunning

  2. The University of Sheffield, Sheffield, UK

    Berna Keskin & Craig Watkins

Authors
  1. Richard Dunning
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  2. Berna Keskin
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  3. Craig Watkins
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Correspondence to Richard Dunning .

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Editors and Affiliations

  1. Property Valuation & Investment DICATECh, Technical University Politecnico di Bari, Bari, Italy

    Maurizio d'Amato

  2. School of the Built Environment, Oxford Brookes University, Headington, Oxfordshire, United Kingdom

    Tom Kauko

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Dunning, R., Keskin, B., Watkins, C. (2017). Using Multi Level Modeling Techniques as an AVM Tool: Isolating the Effects of Earthquake Risk from Other Price Determinants. In: d'Amato, M., Kauko, T. (eds) Advances in Automated Valuation Modeling. Studies in Systems, Decision and Control, vol 86. Springer, Cham. https://doi.org/10.1007/978-3-319-49746-4_13

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  • DOI: https://doi.org/10.1007/978-3-319-49746-4_13

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-49744-0

  • Online ISBN: 978-3-319-49746-4

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