A hybrid fuzzy regression-fuzzy cognitive map algorithm for forecasting and optimization of housing market fluctuations

This paper presents a hybrid algorithm based on fuzzy linear regression (FLR) and fuzzy cognitive map (FCM) to deal with the problem of forecasting and optimization of housing market fluctuations. Due to the uncertainty and severe noise associated with the housing market, the application of crisp data for forecasting and optimization purposes is insufficient. Hence, in order to enable the decision-makers to make decisions with respect to imprecise/fuzzy data, FLR is used in the proposed hybrid algorithm. The best-fitted FLR model is then selected with respect to two indicators including Index of Confidence (IC) and Mean Absolute Percentage Error (MAPE). To achieve this objective, analysis of variance (ANOVA) for a randomized complete block design (RCBD) is employed. The primary objective of this study is to utilize imprecise/fuzzy data in order to improve the analysis of housing price fluctuations, in accordance with the factors obtained through the best-fitted FLR model. The secondary objective of this study is the exhibition of the resulted values in a schematic way via FCM. Hybridization of FLR and FCM provides a decision support system (DSS) for utilization of historical data to predict housing market fluctuation in the future and identify the influence of the other parameters. The proposed hybrid FLR-FCM algorithm enables the decision-makers to utilize imprecise and ambiguous data and represent the resulted values of the model more clearly. This is the first study that utilizes a hybrid intelligent approach for housing price and market forecasting and optimization.