Which statistic is used to measure the relative dispersion of property valuations?

The Coefficient of Variation is used to measure the relative dispersion of property valuations because it standardizes the measure of variability by comparing the standard deviation to the mean value. This statistic expresses the dispersion as a percentage of the mean, allowing for comparison across different datasets and providing insight into how spread out the values are relative to the average. A lower coefficient indicates that property valuations are clustered closely around the mean, while a higher coefficient signifies greater variability and dispersion.

In property assessment contexts, understanding the relative dispersion of valuations is crucial for ensuring equity and consistency in taxation and valuation. It allows assessors to identify areas where valuations may be skewed or inconsistent. By using the Coefficient of Variation, assessors can better evaluate the effectiveness and fairness of property tax systems.

The other options, while related to property valuation or taxation, do not specifically measure the relative dispersion of valuations in the same standardized way that the Coefficient of Variation does. For instance, the Price-Related Differential indicates the relationship between property prices and valuations but does not provide a direct measurement of dispersion. Overall Rate relates to the average tax rate applied but does not concern itself with valuation variability, and the Effective Tax Rate provides insights into the actual rate of tax paid relative to property value, which does