Page 37 - Regression Guideline for AMC
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MAPE
(Mean Absolute Percentage Error)
• The MAPE summarizes the residual scores for a par6cular regression model and the sample on which it was derived and provides an average residual (error)score based on all the proper6es evaluated by the model. In appraisal analysis, MAPE reflects the average amount the predicted values of the comparables deviated from their last known sales prices. The formula for calcula6ng the MAPE once a regression model has been es6mated is simple:
– Subtract the value of each property’s predicted value from its last known sales price to get the devia6on score or error.
– Take the absolute value of the devia6on score to eliminate nega6ve values.
– Divide the absolute value of the devia6on score for each property by the sales price to convert the devia6on score into a percentage of the sales price.
– Total the percentage devia6on scores for all the comparable proper6es examined.
– Divide the total devia6on score by the number of proper6es examined in the model to obtain an average percentage error.
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