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This research suggests improvements to the macroeconomic housing
indices of a thin real estate market, such as that of Cyprus, by testing
various index construction methods with transaction-based data.
Authors employ around 80% of the total number of apartment transfers
documented at the Department of Lands and Surveys (DLS) of
Cyprus, spanning from the first quarter of 2015 to the second quarter
of 2022. They utilize this data to generate comprehensive indices
at both the national and district levels. Authors studied, analyzed,
and identified the deficiencies of the DLS database and tested the
sample with six different methods. Log-linear time dummy hedonic
models were found to explain the variation of prices better than
other methods, mainly due to their ability to handle the diversity of
properties in terms of location and physical characteristics and proposed
techniques to deal with the issues of the standard time
dummy (STD) and rolling time dummy (RTD) methods, regarding
index revisions and low transaction volume during periods of downturns,
respectively. Furthermore, a hybrid dependent variable of
actual and appraised prices, that is, the accepted price, extracts
explicit significantly better statistical measures. Additionally, the overall
model fit was enhanced by introducing locality dummy variables
and, through different combinations of attributes, captured the optimal
results per district. Eventually, when the introduced transaction based
indices were compared to the corresponding existing published
indices, which are based on non-actual data, we saw some
resemblances, but overall, there were wide deviations.

A lot of discussion takes place lately about whether an AVM can replace the valuations made by humans. But what is an AVM? AVM stands for "Automated Valuation Model." It is a mathematical model – computer based- that uses statistical techniques, algorithms, and data to estimate the value of a property.

The subject of the study is pilot clusters that are beneficial to a particular region, taking into account the traditions and production areas of the region. The work aims to develop an innovative strategy for state-supported pilot clusters that would allow for flexible management decision making. The proposed method involves the compound real options to be employed in the following order: 1) an option to reduce and abandon the cluster strategy; 2) an option to develop and replicate the experience accumulated in the cluster; 3) an option to switch from and temporarily stop the cluster strategy; and 4) an option to postpone the implementation of the new cluster strategy. As an example of the implementation of the method presented, the authors discuss the strategy for the development of a pilot electric power cluster in the Nizhny Novgorod region presented by the core company TNS energo NN PJSC. The use of the compound real option method enabled the cost increase of the strategy for this cluster – i.e., the effect of its implementation by the core company rose by 89.1%, from 2 710 022 to 5 124 706 thousand Rubles. Thus, using the compound real options precisely in the presented order avoids unreasonable management decisions to exit the current cluster strategy, which would include many tactical opportunities already implemented for cluster development. First, a put option, i.e., an option to reduce and exit the cluster strategy, supplements the evaluation of the current strategy. If the current strategy continues, the other three options are used.

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