1. Workshop on Residential Property Price Indices
RPPI Handbook
Chapter 8: Appraisal-Based Methods

2. Contents 8.1 Introduction 8.2 Sale price appraisal ratio method
8.3 Main advantages and disadvantages
To be added:
8.4 Example for the Dutch town of “A”
Chapter 8

3. 8.1 Introduction
Standard matched-model methodology not possible due to low incidence of resales (and quality change)
One solution: use of assessed values in repeat sales procedure
Sale price appraisal ratio (SPAR) method: assessed values as base period price in standard methodology
(Re-scaling needed)
Chapter 8

4. 8.2 Sale price appraisal ratio method
Index adjusts for compositional change (with respect to base period)
Arithmetic and geometric variants possible
Can be given a regression interpretation
(Limited) evidence suggests good performance
Chapter 8

5. 8.3 Main advantages and disadvantages
Essentially a standard matched model method
Admin data may be available
More efficient than repeat sales and probably less sample selection bias; no revision
Entirely dependent on the quality of assessment information
Cannot deal adequately with net depreciation
Chapter 8