Statistical Analysis & Mass Appraisal Flashcards

In mass appraisal, which statistical measure is used to indicate the central tendency of a ratio study?

Answer: Median assessment ratio

The median assessment ratio is the primary measure of central tendency used in ratio studies to evaluate assessment level accuracy.

The Coefficient of Dispersion (COD) in a ratio study measures:

Answer: The average absolute deviation from the median ratio

The COD measures the average absolute deviation of individual assessment ratios from the median ratio, indicating uniformity of assessments.

According to IAAO standards, an acceptable COD for residential properties in a typical market is:

Answer: 10% or less

IAAO standards specify a COD of 10% or less for residential properties in typical, homogeneous markets to indicate acceptable uniformity.

The Price-Related Differential (PRD) is used primarily to detect:

Answer: Vertical inequity between high- and low-value properties

The PRD identifies vertical inequity, revealing whether high-value or low-value properties are systematically over- or under-assessed relative to each other.

In multiple regression analysis (MRA) used for mass appraisal, the dependent variable is typically:

Answer: Sale price or assessed value

In MRA for appraisal purposes, the dependent variable is the sale price or assessed value that the model is trying to predict.

A sales ratio study compares:

Answer: Assessed values to market sale prices

A sales ratio study computes the ratio of assessed value to the verified sale price for arms-length transactions to evaluate assessment accuracy.

Which type of regression model assumes that the relationship between property characteristics and value is multiplicative rather than additive?

Answer: Nonlinear or log-linear model

Log-linear (or multiplicative) regression models assume that the effects of property characteristics multiply together, which often better reflects actual property value behavior.