Benedetto Manganelli

Linear Programming in a Multi-Criteria Model for Real Estate Appraisal

In real estate appraisal, research has long been addressed to the experimentation of multi-parametric models able to reduce the margin of error of the estimate and to overcome or to limit, as far as possible, the problems and difficulties that the use of these models often involves. On the one hand, researchers are trying to overcome the essentially deductive approach that has characterized the traditional discipline, and on the other, to minimize the problems arising from a merely inductive approach. The real estate market is characterized by an inelastic supply and by properties whose complexity and differentiation often involve, also and especially on the demand side, subjective and psychological elements that could distort the results of an inductive investigation. This problem can be overcome by increasing the size of the survey sample, and by using statistical analysis. Statistical analyses, however, are often based on very strong assumptions. A multi-criteria valuation model that uses linear programming is applied to the real estate market. The model, integrated with the inductive and deductive approach, exceeds many of the assumptions of the best known statistical approaches.

Hedonic Analysis of Housing Sales Prices with Semiparametric Methods

This study estimates a hedonic price function using a semiparametric regression based on Penalized Spline Smoothing, and compares the price prediction performance with conventional parametric models. The excellent results obtained show that the semiparametric models allow to obtain a significant improvement in the prediction of housing sales prices.

Spline Smoothing for Estimating Hedonic Housing Price Models

The exact prediction of housing selling prices is a relevant issue for real estate market, also to evaluate alternative forms of financial investment. In this paper a hedonic price function built through a semiparametric additive model is implemented. This model use penalized spline functions and aims to achieve a significant improvement in the prediction of the market price of the properties.

Depreciation Methods for Firm’s Assets

This study focuses on the analytical description of depreciation methods applied to firm’s equipments for corporate accounting and balance sheet. Depreciation is a systematic allocation of fixed asset cost over its useful life. Several methods are applied to estimate depreciation cost: Straight-Line Method, Sum of Years Digits Method, Declining Balance Method, Declining Balance Method switched to Straight-Line Method, Interest Methods (Sinking Fund Method and Annuity Method), Usage Methods (Machine Hours Method and Production Units Method), Depletion Method. Each of these depreciation methods have been examined in detail, concluding this work with an analytical and critical comparison between them.

The Economic Evaluation of Investments in the Energy Sector: A Model for the Optimization of the Scenario Analyses

The well-known evaluation indices do not allow to take into account the interaction between current investment alternatives and future decisions. The real options theory provides answers to the limits that the evaluators discovered in the traditional techniques of capital budgeting and allows to give a value to managerial flexibility, i.e. the ability of management to review its decisions on the basis of changes in the economic context. Implementing the traditional cash-flow analysis with the tool of real options, the study defines a logical-operational model capable of verifying the financial viability of investments in the energy sector. The model is applied to the economic study of a project to produce energy from renewable sources, specifically the construction of a new wind farm. The different operational phases of the model used for the optimization of the scenario analyses, return the value of the positive potential that can result from management flexibility and innovation.

Dynamic Analysis of the Property Market in the City of Avellino (Italy)

The dynamics of the housing market have been the subject of study and modelling for several decades (including: Muth, 1963; Ozanne, Thibodeau, 1983; Stiglitz, 1993; Green, Malpezzi and Mayo, 2005). The contingent relationships between the property market and micro and macroeconomic situations are particularly interesting. Studies were carried out by Di Pasquale and Wheaton (1996), with reference to the office property market and the correlation with the construction industry. The model has been adopted in this study, but applied to the residential property market in a medium size city located in southern Italy. The aim includes both the reading of the historical past ten years, with a dynamic approach to the problem, as well as a predictive application of the model for the near future (2013-2015).

Maintenance, Building Depreciation and Land Rent

This paper aims to explore three closely related issues: building maintenance, building depreciation, land rent. What makes these three issues deeply connected is the market value of the property. The choice to carry out preventive or corrective maintenance depends on how the building is affected by age (physical depreciation) and on the trend of land rent. Physical depreciation and land rent are phenomena that act with opposing force in determining the market value of an asset. Because the maintenance is strongly influenced by this value, it becomes crucial to identify the factors that cause it. The combination of the dynamics of two phenomena can (or not) make convenient maintenance. The right interpretation of the correlations in these problem areas can support a better property management / maintenance by owners, managing agents and related parties.

Using Genetic Algorithms in the Housing Market Analysis

This paper tests the use of Genetic Algorithms to interpret the relationship between real estate prices and the geographic locations of the properties. Issues of choosing algorithm parameters are discussed on the basis of applying data collected in the city of Potenza to 190 houses. The aim of the study is to show the potential and the limits of genetic algorithms in this field and how they can be effectively used in the analysis of the housing market.

Optimised management for the development of extraordinary public properties

Purpose – This paper aims to propose a management model of public assets within public-private partnerships which can be applied to properties subject to a possible requalification through the redevelopment and/or modification of the intended use. Design/methodology/approach – The logic developed is described by an algorithm which borrows the mathematical tools of Operations Research to identify the solution that maximises the utility functions of the parties related to the requalification and management of a public property. The unknowns of the model are the price and concession period, while the constraints reflect the specific and reciprocal conveniences of the actors involved. Findings – The benefits for the private investor are a reduction of the business risk, related to the lower financial outlay required by the investment, and therefore easier access to credit from banks. For the public administration, an increase in the demand of the property offered, savings in the property management costs, alo...

Estimating the Market Value of the Building Sites for Homogeneous Areas

The estimated market value of a building site can be determined from several practical reasons. Amongst the various cases, it may be required to determine the market value of the building site aggregated into homogeneous areas, as occurs in the estimates carried out for tax purposes, in the assessments related to the construction of public facilities or infrastructure and urban regeneration interventions related to whole degraded environments. The process outlined in this paper is instrumental to these goals. The method uses an indirect approach to estimate, based on a combination of planning parameters and characteristics of the area that contribute to the formation of market values of building sites. It does not provide a point estimate, relative to assets specifically identified, but produces average market values of the building sites to separate homogeneous areas, for intended use and for building ratio.