Which index must control for differences in the characteristics (e.g., size and location) of the property?

A. A repeat sales index.
B. A hedonic index.
C. An appraisal's based index.

Correct Answer: B

Differences in characteristics cause values to differ so they should be separated from the differences in value due to changes in market conditions. The hedonic procedure models property prices as a function of various characteristics of the properties, such as size, age, location, and quality.