Towards a taxonomy for real estate and land automated valuation systems
| DOI | https://doi.org/10.1108/JPIF-07-2020-0087 |
| Published date | 09 October 2020 |
| Date | 09 October 2020 |
| Pages | 450-463 |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
| Author | Brano Glumac,François Des Rosiers |
Towards a taxonomy for real estate
and land automated
valuation systems
Brano Glumac
Urban Development and Mobility Department,
Luxembourg Institute of Socio-Economic Research, Esch-sur-Alzette,
Luxembourg, and
François Des Rosiers
Finance, Insurance and Real Estate Department, Laval University, Quebec, Canada
Abstract
Purpose –Automated valuation models have been in use at least for the last 50 years in both academia and
practice, while automated valuation recently re-emerged as very important with the rise of digital
infrastructure. The current state of the art, therefore, justifies the dual contributions of this paper: organising
existing knowledge and providing a new framework.
Design/methodology/approach –This paper provides much-needed analysis and synthesis of the
accumulated body of knowledge by proposing an updated classification of automated valuation approaches
based on two criteria, and a taxonomy adapted to new trends. The latter requires a paradigm shift from models
to automated valuation systems. Both classification and taxonomy arose after literature review.
Findings –This paper provides a framework for an explicit context under which automated valuation is
carried out. To do so, authors propose a definition of automation valuation systems; contextualise the
differences among theories, approaches, methods, models and systems present in automated valuation and
introduce a classification of automated valuation approaches and a non-hierarchical taxonomy of automated
valuation systems.
Research limitations/implications –Perhaps, a systematic literature review process instead of a selective
list of 100 references could additionally validate the proposed classification and taxonomy.
Practical implications –The new framework, underlying various dimensions of the automated valuation
process, can help practitioners surpass judging models based purely on their predictive accuracy. Also, the
automated valuationsystem is a more generic term that can better accommodate future research coming from a
multitude of disciplines, more diverse business areas and enlarged variety of practical users.
Originality/value –This is the first paper that develops a taxonomy of automated valuation systems.
Keywords Classification,Automated valuation model, Automated valuation system, Computer-assisted mass
appraisal, Non-hierarchical taxonomy, Real estate valuation decision support systems
Paper type Conceptual paper
1. Introduction
Real estate and land valuation are mostly determined by the property market value that is the
difference between the buyer’s and seller’s reservation price, even though different concepts
of value, worth and price have been debated and addressed (e.g. Mcparland et al., 2000).
Valuation is a non-trivial process. It considers a variety of underlying market factors and
their effects on the value at a given time and location. Such factors may include governmental
policies, geographical factors or even fashion trends and a season of the year. Automated
valuation is a well-established research domain that has recently re-emerged with the rise of
digital infrastructure. Given both, its long history and new trends, this article, therefore,
provides a much-needed analysis and synthesis of the accumulated body of knowledge but
also proposes a new conceptual framework.
Scholars have already surveyed the literature (d’Amato and Kauko, 2017), made attempts
to classify existing automated valuation knowledge (Jahanshiri et al., 2011), made efforts to
discuss automated valuation critically (Mooya, 2016), established the difference between
JPIF
39,5
450
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1463-578X.htm
Received 30 July 2020
Revised 24 September 2020
Accepted 24 September 2020
Journal of Property Investment &
Finance
Vol. 39 No. 5, 2021
pp. 450-463
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-07-2020-0087
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