A ratio study calculates the COD about the mean ratio rather than the median. Under the IAAO Standard on Ratio Studies, what is wrong?
Correct Answer
D) The COD should not be calculated about the mean
The COD measures the average percentage deviation from the median ratio, and the standard states that it should not be calculated about the mean ratio.
Why This Is the Correct Answer
Option D is correct because the COD measures the average percentage deviation from the median ratio, and the IAAO standard states that the COD should not be calculated about the mean ratio. Using the mean changes the measure into something other than the defined COD.
Why the Other Options Are Wrong
Option A: Nothing, since the mean and median are interchangeable
Option A says nothing is wrong because the mean and median are interchangeable, but they are different measures and the standard specifically says the COD should not be calculated about the mean ratio.
Option B: The COD must be calculated about the weighted mean
Option B says the COD must be calculated about the weighted mean, but the COD is defined around the median ratio, not the weighted mean.
Option C: The COD must use squared deviations
Option C says the COD must use squared deviations, but the COD averages absolute deviations from the median. Squared deviations belong to measures such as variance and standard deviation.
COD circles the median
The COD measures how far ratios stray from the median, using absolute deviations, not squares.
How to use: Use this to reject any COD answer built on the mean or on squared deviations.
Exam Tip
Link COD with the median and absolute deviations; answers mentioning the mean or squares describe other measures.
Common Mistakes to Avoid
- -Treating the mean and median as interchangeable for COD
- -Using squared deviations in the COD
- -Computing the COD around the weighted mean
Concept Deep Dive
Analysis
This question tests the definition of the coefficient of dispersion under the IAAO Standard on Ratio Studies. The COD measures the average percentage deviation from the median ratio. The candidate needs to recognize that calculating it about the mean ratio departs from the standard.
Background Knowledge
The coefficient of dispersion is the average absolute deviation of the ratios from the median ratio, divided by the median and expressed as a percentage. It is a standard measure of assessment uniformity in ratio studies. Its definition is tied to the median, which is less affected by outliers than the mean.
Real-World Application
A reviewer checking a county ratio study notices that the COD was computed around the mean ratio. She asks the analyst to recompute it around the median, as the IAAO standard directs, before the uniformity results are reported.
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