steps to hedonic estimation approach

1. Collect relevant data: Gather data on the market area, the characteristics of the property, and any other environmental factors or amenities that may affect the perceived value of the property. 2. Estimate the parameters of the hedonic regression model - Use a statistical model to estimate the impact of the factors identified in step 1 on the selling price of the property. 3. Assess the explanatory power of the model - To ensure the model is valid and useful, assess how much of the variation in sales prices is explained by the model. 4. Test for accuracy of model new data - Test the model against additional sales prices to determine its accuracy in predicting house prices. 5. Comparing estimated market values to appraised market values - Calculate the property's estimated market value according to the hedonic regression model, and compare it with its appraised market value. 6. Check for outliers - The presence of outliers in the hedonic regression model may introduce an error in the model's estimates. Therefore, it is important to identify these outliers and make adjustments if needed.