I’ve come to rely heavily on Microsoft Excel over the years to do my work as a residential appraiser. So much so that I teach classes to other appraisers on how to use Excel in their work. However, after taking George Dell’s first R for Appraisers class recently, I’ve decided to completely revise my workflow and replace what I do in Excel as much as possible with R.
What’s R? might be your first question. R is a free data analytics software package used widely for data analysis. Most university economics programs teach with R these days. Here’s the official description (link). You can download a free copy here.
However, if you’re going to use R, you need to use RStudio, the free integrated development environment for R. It provides a way of seeing more and doing more with the basic R programming language and really extends what you can do with R. Free copy and more information here.
Why would someone who has invested heavily in developing skills in Excel move to a brand new software package? Here are my reasons:
- Data Analytics vs. Spreadsheets Data Retention-R is software designed for data analytics from the ground up. That’s what appraisers do, relatively specialized data analytics. Spreadsheets were designed to replace paper ledgers. You can scribble all over a sheet. If you’re not careful, you’re very likely to write on your numbers and make a mess. This is a problem if you’re trying to preserve your data in the future, say if you need to maintain workfiles like appraisers are legally required to do. R solves this data retention issue.
- Reusable Processes-R is designed from the ground up to be reusable. Drop your data in and get your results. I’ve done a lot to get Excel to work that way for me but I still do a ton of manual processes each time I work on an appraisal. Once I know what I’m doing in R, I’ll have a lot fewer manual processes to deal with. It will be easy for someone else to audit my analysis for appraising.
- Superior Analysis-I use pivot tables a lot in Excel. In fact, I teach a class on using pivot tables for appraisers. The big drawback with Excel pivot tables is that I can’t include median values as part of my summaries without a lot of work (coding or buying someone else’s product). This is not an issue in R.
- Personal Growth-R gives me an opportunity to learn new ways to analyze data, the underlying job function that has given me the most satisfaction throughout my career. I’m excited to learn new ways to do my job better and I expect big changes once I’ve completed the move to R. Also, if this appraising gig doesn’t work out, with R I’ll have a job skill in demand in other industries.
I plan to document my migration from Excel to R here. I’ll share resources I find useful and will discuss issues I run into. I also plan to describe the benefits and drawbacks. This is mainly for me, and maybe Abdur Abdul-Malik and Bruce Hahn, the other appraisers I know making the same journey. And maybe I can help George Dell come up with ideas on how to spread the word to the rest of the industry. Thanks again George for the inspiration.