Hedonic, Residual, and Matching Methods for Residential Land Valuation  

Steven C. Bourassa* (Corresponding Author), Martin Hoesli

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


Accurate estimates of land values on a property-by-property basis are an important requirement for the effective implementation of land-based property taxes. We compare hedonic, residual, and matching techniques for mass appraisal of residential land values, using data from Maricopa County, Arizona. The first method involves a hedonic valuation model estimated for transactions
of vacant lots. The second approach subtracts the depreciated cost of improvements from the value of improved properties to obtain land value as a residual. The third approach matches the sales of vacant lots with subsequent sales of the same properties once they have been developed. For each pair, we use a land price index to inflate the land price to the time of the improved
property transaction and then calculate land leverage (the ratio of land to total property value). A hedonic model is estimated and used to predict land leverage for all improved properties. We conclude that the matching approach is the most promising of the methods considered.
Original languageEnglish
Article number101870
Number of pages11
JournalJournal of Housing Economics
Issue numberPart A
Early online date7 Dec 2022
Publication statusPublished - 7 Dec 2022

Bibliographical note

Funding: This work was supported by the Lincoln Institute of Land Policy, Cambridge, MA


  • Land valuation
  • Hedonic method
  • Residual approach
  • Land leverage
  • Matching approach


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