Real estate appraisal: A double perspective data envelopment analysis approach

This paper proposes a new methodology for the assessment of the value range for real estate units. The theoretical basis of the methodology is built on the Data Envelopment Analysis-DEA approach, which has its original concept adapted to the case where the units under assessment consist of transactions among sellers and buyers. The proposed approach-christened Double Perspective-Data Envelopment Analysis (DP-DEA)-is applied to a database comprising the prices and features of the units under assessment. It is shown that the DP-DEA presents some specific advantages when compared to the usual regression analysis method employed in real estate value assessment.