Rough Set Theory for Real Estate Appraisal: An Application to Directional District of Naples

Abstract

This paper proposes an application of Rough Set Theory (RST) to the real estate field, in order to highlight its operational potentialities for mass appraisal purposes. RST allows one to solve the appraisal of real estate units regardless of the deterministic relationship between characteristics that contribute to the formation of the property market price and the same real estate prices. RST was applied to a real estate sample (office units located in Directional District of Naples) and was also integrated with a functional extension so-called Valued Tolerance Relation (VTR) in order to improve its flexibility. A multiple regression analysis (MRA) was developed on the same real estate sample with the aim to compare RST and MRA results. The case study is followed by a brief discussion on basic theoretical connotations of this methodology