What is the purpose of model specification and model calibration in mass appraisal?

The purpose of model specification and model calibration in mass appraisal is fundamentally about determining what factors to include in the appraisal model and how those factors should interact within the model framework. Model specification involves selecting the appropriate variables and defining the structure of the model, ensuring that the right attributes that influence property values are included. This is critical, as a well-specified model accurately reflects the relationship between property characteristics and their market values.

Calibrating the model means adjusting the model parameters so that it accurately estimates property values based on historical sales data. This adjustment ensures that the model aligns with market trends and dynamics, making it more reliable for future valuations.

By focusing on what and how to include in the model, appraisers can create a more effective tool that reflects real market conditions, leading to more accurate property assessments. This is essential in mass appraisal, where multiple properties are evaluated simultaneously, and accuracy is key to equitable taxation and market assessment. The other options, while they might suggest related activities, do not encompass the comprehensive focus on defining and refining the modeling approach as it pertains specifically to appraisal accuracy and effectiveness.