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dc.contributor.authorLorenz, Felix
dc.contributor.authorWillwersch, Jonas
dc.contributor.authorCajias, Marcelo
dc.contributor.authorFuerst, Franz
dc.date.accessioned2022-06-01T23:30:20Z
dc.date.available2022-06-01T23:30:20Z
dc.date.issued2022-05-31
dc.identifier.issn1080-8620
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/337669
dc.description.abstractWhile Machine Learning (ML) excels at predictive tasks, its inferential capacity is limited due to its complex non-parametric structure. This paper aims to elucidate the analytical behavior of ML through Interpretable Machine Learning (IML) in a real estate context. Using a hedonic ML approach to predict unit-level residential rents for Frankfurt, Germany, we apply a set of model-agnostic interpretation methods to decompose the rental value drivers and plot their trajectories over time. Living area and building age are the strongest predictors of rent, followed by proximity to CBD and neighborhood amenities. Our approach is able to detect the critical distances to these centers beyond which rents tend to decline more rapidly. Conversely, close proximity to hospitality facilities as well as public transport is associated with rental discounts. Overall, our results suggest that IML methods provide insights into algorithmic decision-making by illustrating the relative importance of hedonic variables and their relationship with rental prices in a dynamic perspective.
dc.publisherWiley
dc.rightsAll Rights Reserved
dc.rights.urihttp://www.rioxx.net/licenses/all-rights-reserved
dc.subjectInterpretable Machine Learning
dc.subjectMicroeconomic Hedonic Pricing
dc.subjectHousing Markets
dc.subjectRental Markets
dc.titleInterpretable Machine Learning for Real Estate Market Analysis
dc.typeArticle
dc.publisher.departmentDepartment of Land Economy
dc.date.updated2022-05-31T10:26:30Z
prism.publicationDate2022
prism.publicationNameReal Estate Economics
dc.identifier.doi10.17863/CAM.85075
dcterms.dateAccepted2022-05-06
rioxxterms.versionofrecord10.1111/1540-6229.12397
rioxxterms.versionAM
dc.contributor.orcidFuerst, Franz [0000-0001-5317-1469]
dc.identifier.eissn1556-5068
rioxxterms.typeJournal Article/Review
cam.orpheus.success2022-06-01 - Embargo set during processing via Fast-track
cam.depositDate2022-05-31
pubs.licence-identifierapollo-deposit-licence-2-1
pubs.licence-display-nameApollo Repository Deposit Licence Agreement
rioxxterms.freetoread.startdate2021-10-28


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