1# RECORD 9227a7e5ee91510694ed7aa9358e1709d0798b322# TITLE: A comparison between mra and rough set theory for mass appraisal. A case in bari3# YEAR: 2004.0 VENUE: nan DOI: 10.3846/1648715x.2004.96375184# AUTHORS: M. D'Amato5# PAGES: 13 CANDIDATE TABLE PAGES (1-based): []6# ABSTRACT: Rough Set Theory is a property valuation methodology recently applied to property market data (d'Amato, 2002). This methodology may be applied in property market where few market data are available or where econometric analysis may be difficult or unreliable. This methodology was introduced by a polish mathematician (Pawlak, 1982). The model permit to estimate a property without defining an econometric model, although do not give any estimation of marginal or hedonic prices. I : ,he first version of RST was necessary to organize the data in classes before the valuation .The relationship between these classes defined if‐then rules. If a property belongs to a specific group then it will belong to a class of value. The relationship between the property and the class of value is dichotomous. In this paper will be offered a second version that improve the RST with a “value tolerance relation” in order to make more flexible the rule. In this case the results will come out from an explicit and specific relationship. The methodology has been tested on 69 transactions in the zone of Carrassi‐Poggiofranco in the residential property market of Bari.789===== PAGE 1 (score 5, numeric-paren 0, table-words 1, var-words 3) =====1011International Journal of Strategic Property Management (2004) 8, 205-217 12A COMPARISON BETWEEN MRA AND ROUGH SET THEORY FOR MASS 13APPRAISAL. A CASE IN BARI 14Maurizio d'AMATO 151st School of Engineering, The University Polytechnic of Bari, 272, Calefati Street, 70122, Bari - Italy 16tel. +39 80 5216009 mobile +39 340 2291722 17E-mail: madamato@interfree.it; website: www.damato.has.it; website:www.noaves.com 18Received 9 September 2004; accepted 9 November 2004 19ABSTRACT. Rough Set Theory is a property valuation methodology recently applied to property market data 20(d'Amato, 2002). This methodology may be applied in property market where few market data are available or 21where econometric analysis may be difficult or unreliable. This methodology was introduced by a polish 22mathematician (Pawlak, 1982). The model permit to estimate a property without defining an econometric model, 23although do not give any estimation of marginal or hedonic prices. I : ,he first version of RST was necessary to 24organize the data in classes before the valuation .The relationship between these classes defined if-then rules. If 25a property belongs to a specific group then it will belong to a class of value. The relationship between the 26property and the class of value is dichotomous. In this paper will be offered a second version that improve the 27RST with a "value tolerance relation" in order to make more flexible the rule. In this case the results will come 28out from an explicit and specific relationship. The methodology has been tested on 69 transactions in the zone of 29Carrassi-Poggiofranco in the residential property market of 30Bari. 31KEYWORDS: Property Valuation; Rough Set Theory; Valued Tolerance Relation 321. INTRODUCTION 33Mass appraisal is the systematic appraisal of 34groups of properties at a given date using 35standardized procedures and statistical testing. In the 36property market econometric modelling tries to 37replicate 38the 39market 40behaviour 41through 42a 43representative model. In particular hedonic price 44modelling looks for an econometric relationship 45between the price and the property characteristics. 46This methodology (Griliches, 1971; Rosen, 1974) is 47based on demand side analysis in a static framework. 48For this reason statistic data analysis has theoretical 49weakness (Lentz and Wang, 1998) and may be not 50efficient in those markets where the uncertainty is 51high because of the unreliability of 52information sources. In these cases the relationship 53between the dependent variable normally the 54property price and the independent variables or 55property characteristics may not be econometrically 56modelled. In some property markets the price 57dynamic could be described through non-monotonic 58processes, therefore alternative "heretic approaches" 59(Kauko and d'Amato, 2004) approaches have been 60proposed 61as 62neural 63network 64(Borst, 651992; 66McCluskey et al, 1997; Rossini, 1997; Nguyen N. et 67al., 2001) or AHP (Kauko, 2002). In this group 68Rough Set Theory has been applied for the first time 69(d'Amato, 2002) to a small sample of residential 70property transactions in the real estate market of 71Bari. In the first application of RST the final output 72was a if-then rule that indi- 73International Journal of Strategic Property Management 74ISSN 1648-715X 75http://www.vtu.lt/english/editions 76