Estimation of housing prices in Ecuador using hedonic and geostatistical models: A comparative analysis
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Abstract
This paper compares the results of two models, one hedonic and the other geostatistical, when obtaining housing price estimates in the Rumiñahui canton, Ecuador. In the first model, different parameterizations of the variables that make up the hedonic model are used to obtain the best predictions. For the geostatistical case, the predictions are composed of a trend function that depends on certain housing characteristics and a spatial error term, which is modeled from a residual variogram. The performance of each model is compared by an analysis of prediction errors from a validation data set. The results indicate a better performance for the geostatistical model, since it considers, in addition to certain inherent characteristics of each house, the effect of its spatial location on the selling price
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