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Consistency of Land Values

Comparison of Three General Approaches to Valuing Land Where There are Few Vacant Land Sales

Michael E. Bell and John H. Bowman

April 2008, English

Accurate land valuation is critical to land value taxation, which taxes land more heavily than improvements. In previous work we found three approaches to valuing the land component of improved properties. Using data for recently sold single-family residences in three study areas—one each for the three valuation approaches—this paper applies an hedonic pricing model to estimate in a single, consistent manner the land contribution to market value of sold properties. These estimated land values then are compared to the assessed values of land obtained from the localities.