A multiple indicators and multiple causes model for valuation

Value assessment (valuation) of certain real properties is commonly required for a variety of purposes. In this article an approach to define an estimator of the value of a real property, with good statistical properties is proposed. This estimator reaches a consensus between the various available methods. The estimator proposed uses all available information optimally, including the information which value indicators contain on the effect of contextual factors, and this furnishes it with a greater relative efficiency with regard to alternative estimators. It is also shown how the proposed approach is more general and flexible than the usual hedonic approach. The approach is illustrated using data on agricultural real properties and the relative efficiency of the compromise estimator is assessed using this same data. Additional key words: hedonic price modeling, land valuation, latent variables, measurement errors, unbiased and optimal linear estimators.