Schulz, Rainer Staiber, Markus Wersing, Martin Werwatz, Axel
Year of Publication:
SFB 649 Discussion Paper No. 2008,019
By using a unique data set of single-family house transactions, we examine the accuracy of the cost and sales comparison approach over different forecast horizons. We find that sales comparison values provide better long-term forecasts than cost values if the economic loss function is symmetric. A weighted average of both sales comparison value and cost value can reduce this loss even further. If the economic loss function is asymmetric, however, cost values might provide better long-term forecasts.