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- Economic (External) Obsolescence(1) A cause of depreciation that is a loss in value as a result of impairment in utility and desirability caused by factors outside the property's boundaries. (2) Loss in value of a property (relative to the cost of replacing it with a property of equal utility) that stems from factors external to the property. For example, a buggy-whip factory, to the extent that it could not be used economically for anything else, suffered substantial economic obsolescence when automobiles replaced horse-drawn buggies.
- Effective AgeThe typical age of a structure equivalent to the one in question with respect to its utility and condition, as of the appraisal date. Knowing the effective age of an old, rehabilitated structure or a building with substantial deferred maintenance is generally more important in establishing value than knowing the chronological age.
- Effective ChallengeFrom a regulatory standpoint, effective challenge of an AVM requires critical analysis by objective, informed parties that can identify model limitations and produce appropriate changes; effective challenge depends on a combination of incentives, competence and influence.
- EfficiencyThe extent to which an organization will be able to use a particular AVM or AVM cascade for a specific application. Analysts frequently measure efficiency or ‘usability’ through various hit rates, especially usable hit rates.
- Elasticity(1) The responsiveness of supply and demand to changes in price. Supply or demand that changes rapidly in response to price changes is "elastic." Supply or demand that changes slowly in response to price changes is "inelastic." (2) A measure of the responsiveness of tax yields to changes in economic conditions. The yield of an elastic tax increases rapidly in a growing economy. The yield of an inelastic tax increases slowly. Often measured by the formula: percent change in tax ÷ percent change in personal income.
- ErrorThe difference between the actual value of a variable and the expected value of the variable exclusive of sampling problems. Errors may be positive or negative, although in common speech taking the absolute value of the errors is sometimes implied. In multiple regression analysis, the term "error" is often used loosely to mean residual.
- Estate, RealSee real estate.
- Estimated ValueThe estimated Market Value as of a specified date.
- Euclidean Distance MetricA measure of distance between two points “as the crow flies”. In property valuation it is used to find the nearest neighbor, or similar property based on an index of dissimilarity between property location, or attributes. When using multi-variate selection the squared difference is divided by the standard deviation of the variable so as to normalize the differences. Also see Minkowski Metric
- Exploratory Data AnalysisThat part of statistical practice concerned with reviewing the data set to isolate structures, uncover patterns, or reveal features that may improve the confirmatory analysis.
- ExponentA symbol usually written to the right and above an expression to indicate particular mathematical operations. For example, 62 means 6 × 6, or six squared. Fractional exponents indicate inverse operations; for example, an exponent of 1/2 signifies a square root. Exponents are also called powers. Valuation models make use of the following properties of exponents: A number raised to the exponent 0 is always 1.00; zero raised to any power is zero; any number raised to the power 1 is itself. Negative numbers cannot have exponents less than 1.
Sources:
a) AVMetrics
b) AVMs 201: A Practical Guide to the Implementation of Automated Valuation Models, Jim Kirchmeyer, 2008.
c) IAAO 2015, Glossary for Property Appraisal and Assessment, 2015. (2013 online: https://www.iaao.org/media/Pubs/IAAO_GLOSSARY.pdf )
d) Collateral Assessment & Technologies Committee, Summary of Definitions & Terms, 2006.
e) Joint Industry Task Force on AVMs, IAAO Standard on AVM Glossary, September 2003. https://www.iaao.org/media/standards/AVM_STANDARD.pdf
f) Appraisal Institute, Joint Industry Task Force on Automated Valuation Models, Work Group Terminology, 2005.
g) Merriam-Webster (https://www.merriam-webster.com/)