The term 'Coefficient of Dispersion' refers to what?

The 'Coefficient of Dispersion' is a statistical measure used to evaluate the uniformity of property assessments within a specific area. It provides insight into the consistency of assessments compared to market values. The correct interpretation is found in dividing the average deviation by the median of the assessments.

Using the median as the denominator is crucial because it is less affected by extreme values than the mean, which makes it a more robust measure in the context of property assessments. This helps to assess how property values distribute around the median, indicating whether they are equitable or if there are significant disparities among assessed values. A lower coefficient suggests more uniform assessments, while a higher coefficient indicates greater disparity and potential inequities in the assessments.

The other choices do not accurately represent the Coefficient of Dispersion. For instance, multiplying total deviation or dividing by the mean would distort the measure by introducing biases influenced by outliers, making those options less effective for assessing fairness in property valuation. Overall, the correct understanding of the Coefficient of Dispersion aids appraisers and assessors in ensuring equitable assessments within their jurisdiction.