Which statement best describes the regression principle?

Which statement best describes the regression principle?

• A. Substitution
• B. Progression
• C. Regression
• D. Conformity

Answer: (C)

Regression holds that the value of a higher-valued property tends to be pulled down by nearby lower-valued properties, bringing prices toward the neighborhood average. For example, a luxury home in a mixed area with several modest houses often doesn’t command as high a price as a similar luxury home in a uniformly affluent neighborhood, because buyers compare it with surrounding lower-priced homes. This downward pressure on the high end is what regression describes. By contrast, progression would describe lower-valued properties gaining value from upscale neighbors, substitution focuses on competing options you could choose instead, and conformity describes values moving toward the neighborhood average in general.

Regression holds that the value of a higher-valued property tends to be pulled down by nearby lower-valued properties, bringing prices toward the neighborhood average. For example, a luxury home in a mixed area with several modest houses often doesn’t command as high a price as a similar luxury home in a uniformly affluent neighborhood, because buyers compare it with surrounding lower-priced homes. This downward pressure on the high end is what regression describes. By contrast, progression would describe lower-valued properties gaining value from upscale neighbors, substitution focuses on competing options you could choose instead, and conformity describes values moving toward the neighborhood average in general.