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Municipal Non-Residential Real Property Valuation Forecast Accuracy

Author

Listed:
  • Arnold Cote, K. Nicole
  • Smith, Wm. Doyle
  • Fullerton, Thomas M., Jr.

Abstract

The objective of this study is to estimate the accuracy and/or reliability of alternative methods of forecasting property valuations of non-residential real commercial and industrial property in El Paso to improve municipal revenue forecasting. This study seeks to identify and evaluate four econometric and statistical alternatives to present forecasting practices for nonresidential property valuation forecasts: (1) a traditional income elasticity method, (2) a regional structural econometric model, (3) a statistical ARIMA method, and (4) trend analysis. In order to evaluate the four models, ex ante forecast simulations are created for each modeling approach and then compared to random walk and random walk with drift models for both commercial and industrial property values. Results indicate that the random walk with drift model outperformed all four models for both commercial and industrial property values. In addition, results also indicate that the random walk model outperformed all four models for industrial property values.

Suggested Citation

  • Arnold Cote, K. Nicole & Smith, Wm. Doyle & Fullerton, Thomas M., Jr., 2010. "Municipal Non-Residential Real Property Valuation Forecast Accuracy," MPRA Paper 32116, University Library of Munich, Germany, revised 11 Feb 2011.
    • Handle: RePEc:pra:mprapa:32116
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    File URL: https://mpra.ub.uni-muenchen.de/32116/1/MPRA_paper_32116.pdf
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    References listed on IDEAS

    as
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    8. Fullerton, Thomas & Aragones-Zamudio, Victor, 2006. "El Paso Property Tax Abatement Ineffectiveness," MPRA Paper 626, University Library of Munich, Germany, revised 2006.
    9. Thomas M Fullerton Jr & Arturo Elias, 2004. "Short-Term Water Consumption Dynamics in El Paso, Texas," Others 0410005, University Library of Munich, Germany.
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    12. Thomas M. Fullerton Jr. & George Novela, 2010. "Metropolitan Maquiladora Econometric Forecast Accuracy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 124-140, September.
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    Cited by:

    1. Thomas M. Fullerton & Arturo Bujanda, 2018. "Commercial property values in a border metropolitan economy," Asia-Pacific Journal of Regional Science, Springer, vol. 2(2), pages 337-360, August.

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    More about this item

    Keywords

    Non-residential property valuation forecasts; regional economics; applied econometrics;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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