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Confirmation Bias in the Valuation Process: A Test for Corroborating Evidence.
, 13
Appraisal Smoothing: The Other Side of the Story.
, 26
Estimating Real Estate's Systematic Risk from Aggregate Level Appraisal-Based Returns.
Price Knowledge Induced Bias: A Cross Cultural Comparison.
, 15
Investor Overreaction: Evidence that its Basis is Psychological.
, 1
How Reliable are Commercial Property Appraisals? Another Look.
, 16
The Influence of Clients on Valuations: The Clients' Perspective.
, 23
Smoothing in an Appraisal-Based Returns.
, 4
Biases in Appraisal Land Price Information: The Case of Japan.
, 24
Valuation Bias in Commercial Appraisal: A Transaction Price Feedback Experiment.
, 29
Property Valuation Variation and the ‘Margin of Error' in the UK.
, 15
Real Estate Development as an Option.
, 4
Variations in the Capital Valuations of UK Commercial Property.
Decision Making in Small Property Companies.
, 18
Comparison of Bayesian and Regression Approaches to the Study of Information Processing in Judgment.
, 6
Expert Property Negotiators and Pricing Information, Revisited.
, 15
The Framing of Decision and the Psychology of Choice.
, 211
Valuation of Residential Property: Analysis of Participant Behavior.
, 14
Aspects of Information Processing in Valuation Judgment and Choice.
, 11
Heuristic Use, Credit Constraints and Real Estate Lending.
, 15
Judgment under Uncertainty: Heuristics and Biases.
, 185
Commercial Property Prices and Valuations: Analyzing the Correspondence.
, 12
The Role of Investor Sentiment in Property Investment Decisions.
, 19
Megbolugbe. Appraisals, Transaction Incentives, and Smoothing.
, 14
The Use of Reference Points in Valuation Judgment.
, 18
Real Estate Returns: A Comparison with Other Investments
, 12
Theory of Behavioral Finance and its Application to Property Market: A Change in Paradigm
The Use of Information Versus Asking Price in the Real Property Negotiation Process
, 13
Do Valuers have a Greater Tendency to Adjust a Previous Valuation Upwards or Downwards?
, 17
Empirical Testing of Real Option Pricing Models Using Land Price Index In Japan.
, 19
The Influence of Clients on Valuations.
, 17
Price Formation and the Appraisal Function in Real Estate Markets.
, 4
Effects of Trend and of Profit or Loss on the Tendency to Sell Stock.
, 8
Valuation Uncertainty and the Mallinson Report.
, 15
How Valuers Use the Value Opinions of Others.
, 15
A Longitudinal Examination of the Appraisal Smoothing Hypothesis.
, 26
A Portrait of the Individual Investor-Heuristics and Biases.
, 42
A Different Look at Commercial Real Estate Returns.
, 18
Appraisal-Based Real Estate Returns under Alternative Market Regimes.
, 20
The End of Behavioral Finance.
Real Estate in Global Cities: Singapore and Hong Kong as Property States.
, 37
Does Contingent Reward Reduce Negotiation Anchoring?
, 17
Urban Regimes and Growth Machines: Toward a Cross-National Research Agenda.
, 29
Smoothing in Commercial Property Valuations: Evidence from the Trenches.
, 16
How Appraisers Do Their Work: A Test of the Appraisal Process and the Development of a Descriptive Model.
, 5
Variance in Property Valuations for Commercial Lending. Royal Institutions of Chartered Surveyors.
, 4
An Empirical Analysis of Property Appraisal and Mortgage Redlining.
, 13
Bias in Appraisal-Based Returns
, 17
A Review of the Practical Uses of Real Property Options.
, 5
Real Option Premium in Hong Kong Land Prices.
Client Pressure in the Commercial Appraisal Industry: How Prevalent Is It?
, 15
Investor Psychology and Security Market Under- and Overreactions.
, 53
Temporary Aggregation in Real Estate Return Indices.
, 21
Experts, Amateurs and Real Estate: An Anchoring-and-Adjustment Perspective on Property Pricing Decisions.
, 39
On the Reliability of Commercial Appraisals: An Analysis of Properties Sold from the Russell-NCREIF Index (1978-1992).
, 11
Smoothing in Commercial Property Valuations: Evidence from Individual Appraisals.
, 29
Urban Land Prices under Uncertainty.
, 75
Empirical Testing of Real Option-Pricing Models.
, 48
An Investigation into the Impact of Previous Expert Value Estimates on Appraisal Judgment
, 13
Optimal Timing of a Real Estate Development Under Uncertainty.
, 19
The Political Economy of Growth Machines.
, 15
Office Market Values During the Past Decade: How Distorted Have Appraisals Been?
, 23
An Empirical Analysis of Valuation Accuracy and Variation-Hong Kong Evidence
This paper reviews the literature on appraisal bias and summarizes three hypotheses for systematic bias: behavior contention, options-value, and different-base-of-valuation. A case study based in Hong Kong is presented that portrays empirical evidence of appraisal bias in land premiums. Land premium appraisals are analyzed because they can help keep the depreciation factor constant and provide good pairs of transaction price and estimate. These appraisals are collected from published estimates, which eliminate the client-agent heuristic. Among the 343 appraisals of land premiums for 109 auctions of land in Hong Kong from 1991 to 1999, evidence of an 8% systematic appraisal downward bias is found in appraisers' estimates against the final bid prices. Although it can be explained plausibly by appraiser-behavior contention, there is also empirical evidence supporting the other two hypotheses.
Journal of Real Estate Literature – Taylor & Francis
Published: Jan 1, 2006
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