A price-related differential above 1.03 in a ratio study suggests which pattern?
Correct Answer
A) Higher-value properties are assessed relatively lower
Why this is correct: The price-related differential (PRD) detects assessment regressivity or progressivity. A PRD significantly above 1.03 indicates regressivity, meaning higher-value properties are assessed at a lower proportion of their value (relatively lower) compared to lower-value properties. Why the other choices are wrong: A PRD above 1.03 suggests the opposite of lower-value properties being assessed relatively lower. It indicates non-uniformity, not uniformity. The PRD calculation itself does not comment on sample size adequacy. Exam tip: PRD > 1.03 = Regressive (high-value properties under-assessed). PRD < 0.98 = Progressive (high-value properties over-assessed).
Why This Is the Correct Answer
Why this is correct: The price-related differential (PRD) detects assessment regressivity or progressivity. A PRD significantly above 1.03 indicates regressivity, meaning higher-value properties are assessed at a lower proportion of their value (relatively lower) compared to lower-value properties. Why the other choices are wrong: A PRD above 1.03 suggests the opposite of lower-value properties being assessed relatively lower. It indicates non-uniformity, not uniformity. The PRD calculation itself does not comment on sample size adequacy. Exam tip: PRD > 1.03 = Regressive (high-value properties under-assessed). PRD < 0.98 = Progressive (high-value properties over-assessed).
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