caa a22 4500 477129889 CHVBK 20180405111701.0 cr unu---uuuuu 170330e19970101xx s 000 0 eng 10.1023/A:1007772018106 doi (NATIONALLICENCE)springer-10.1023/A:1007772018106 Appraisals, Transaction Incentives, and Smoothing [Elektronische Daten] [Peter Chinloy, Man Cho, Isaac Megbolugbe] This article is structured around three principal objectives. The first is to determine whether any incentives for appraisals support an underlying purchase offer, which may be termed a transaction bias. Appraisals that are lower than purchase prices could involve additional cost for justification and thus undermine the transaction. The second objective is to test whether appraisal data are smoothed or exhibit less volatility than purchase data. The article compares the volatility of separate appraisal and purchase data. Given separate appraisal and purchase time series, the third objective is to derive the implied optimal appraisal updating rule. The model is applied to appraisal and purchase price indices for 3.7 million repeat transactions on mortgages bought by Fannie Mae and Freddie Mac by using monthly data from January 1975 to December 1993. The estimation procedure uses generalized autoregressive conditioned heteroskedastic (GARCH) analysis to take account of persistence in means and volatility in the house price time series. The article draws three principal conclusions. First, appraisals are systematically higher than purchase data, a first-moment differential. Second, appraisal smoothing does not occur generally. Third, the appraisal updating rule for the United States appears to involve error correction whereby underappraisals from pervious periods are eventually adjusted. Kluwer Academic Publishers, 1997 appraisal smoothing nationallicence appraisal bias nationallicence house priceindices nationallicence house price volatility nationallicence Chinloy Peter American University, 20016-8044, Washington, DC aut Cho Man Fannie Mae, 20016-2899, Washington, DC aut Megbolugbe Isaac Fannie Mae, 20016-2899, Washington, DC aut The Journal of Real Estate Finance and Economics Kluwer Academic Publishers 14/1-2(1997-01-01), 89-111 0895-5638 14:1-2<89 1997 14 11146 https://doi.org/10.1023/A:1007772018106 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1023/A:1007772018106 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Chinloy Peter American University, 20016-8044, Washington, DC aut NATIONALLICENCE 700 1- Cho Man Fannie Mae, 20016-2899, Washington, DC aut NATIONALLICENCE 700 1- Megbolugbe Isaac Fannie Mae, 20016-2899, Washington, DC aut NATIONALLICENCE 773 0- The Journal of Real Estate Finance and Economics Kluwer Academic Publishers 14/1-2(1997-01-01), 89-111 0895-5638 14:1-2<89 1997 14 11146 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer