Rule-based and case-based reasoning in housing prices

Gabrielle Gayer*, Itzhak Gilboa, Offer Lieberman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

45 Scopus citations

Abstract

People reason about real-estate prices both in terms of general rules and in terms of analogies to similar cases. We propose to examine empirically which mode of reasoning fits the data better. To this end, we develop the statistical techniques required for the estimation of the case-based model. It is hypothesized that case-based reasoning will have relatively more explanatory power in databases of rental apartments, whereas rule-based reasoning will have a relative advantage in sales data. We motivate this hypothesis on theoretical grounds, and find empirical support for it by comparing the two statistical models (rule-based and case-based) on two databases (rentals and sales).

Original languageEnglish
Article number10
JournalB.E. Journal of Theoretical Economics
Volume7
Issue number1
DOIs
StatePublished - 2007

Funding

FundersFunder number
Sapir Center at Tel-Aviv University
Israel Science Foundation355/06, 975/03

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