Stang, Moritz and Kraemer, Bastian and Cajias, Marcelo and Schaefers, Wolfgang (2023) Changing the Location Game - Improving Location Analytics with the Help of Explainable AI. JOURNAL OF REAL ESTATE RESEARCH. ISSN 0896-5803, 2691-1175
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Besides its structural and economic characteristics, the location of a property is probably one of the most important determinants of its underlying value. In contrast to property valuations, there are hardly any approaches to date that evaluate the quality of a real estate location in an automated manner. The reasons are the complexity, the number of interactions and the non-linearities underlying the quality specifications of a certain location. By combining a state-of-the-art machine learning algorithm and the local post-hoc model agnostic method of Shapley Additive Explanations, this paper introduces a newly developed approach - called SHAP location score - that is able to detect these complexities and enables assessing real estate locations in a data-based manner. The SHAP location score represents an intuitive and flexible approach based on econometric modeling techniques and the basic assumptions of hedonic pricing theory. The approach can be applied post-hoc to any common machine learning method and can be flexibly adapted to the respective needs. This constitutes a significant extension of traditional urban models and offers many advantages for a wide range of real estate players.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | MASS APPRAISAL; MODEL; VALUES; DISTANCE; IMPACTS; TRANSIT; PRICES; Location Analytics; Explainable AI; Machine Learning; Shapley Values; Automated Location; Valuation Model |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Immobilienenwirtschaft / IRE|BS > Lehrstuhl für Immobilienmanagement (Prof. Dr. Wolfgang Schäfers) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 27 Feb 2024 10:45 |
| Last Modified: | 27 Feb 2024 10:45 |
| URI: | https://pred.uni-regensburg.de/id/eprint/59099 |
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