Vol. 85 (2024)
Original Articles - Urban, Land, Environmental Appraisal and Economics

Alternative methods for measuring the influence of location in hedonic pricing models

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  • Marco Aurelio Stumpf Gonzalez,
  • Diego Alfonso Erba
Marco Aurelio Stumpf Gonzalez
Polytechnic School, Universidade do Vale do Rio dos Sinos, São Leopoldo, Brazil
Diego Alfonso Erba
Independent researcher and consultant
DOI: https://doi.org/10.36253/aestim-15472

Published 2025-02-14

Keywords

  • Location quality,
  • Hedonic modeling,
  • Machine Learning,
  • Fuzzy logic,
  • Kriging

Copyright (c) 2024 Marco Aurelio Stumpf Gonzalez, Diego Alfonso Erba

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

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Abstract

The effects of location play a crucial role in the real estate market, encompassing aspects of accessibility and neighborhood. However, these are elements that are not directly measurable. There are traditional ways to consider location, usually through subjective measures based on professional experience, through proxy variables. Understanding these elements is vital for estimating real estate values, whether for legal, commercial, or tax purposes. Furthermore, seeking more objective options is a relevant issue to broaden the justification of estimated values and to enable the development of mass appraisal models. This article proposes and evaluates alternative solutions based on statistics, machine learning, and geostatistics to estimate location. A study was conducted using market data from Novo Hamburgo, southern Brazil, verifying the feasibility of the options presented. Satisfactory statistical results demonstrate the viability of the proposed approach.

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