August 28, 2017 Articles

Hedonics, Litigation, and Property Value Diminution

An explanation of the theoretical basis for hedonic regression and its three most frequent uses in contaminated-property litigation.

By Jack Williamson, Orell C. Anderson, and Alexander R. Wohl – August 28, 2017

As the complexity and scale of contaminated property litigation shows no signs of abating, reliance on regression analysis in damage claims has become increasingly common. There are cases where performing a traditional appraisal for each individual property is simply infeasible—for example, when assessing large-scale damage claims or when attempting to establish a class certification. In such cases, regression analysis can be an indispensable tool for litigants.

There are hazards, however, when dealing with regression analysis. Like any method, regression can be used, and it can be abused. It is important to look under the hood and use common sense when evaluating these types of analyses. 

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