What is the formula to calculate the coefficient of dispersion (COD)?

The coefficient of dispersion (COD) is a statistical measure used in the field of appraisal to assess the uniformity and quality of property assessments. It specifically measures the extent of variability in property assessments relative to the median ratio of assessed values to market values.

To calculate the COD, the formula used is the Mean Deviation divided by the Median Ratio. The Mean Deviation reflects the average absolute deviation of individual assessed values from the median, while the Median Ratio provides a central tendency measure, accounting for outliers that can skew the average. By using the median rather than the mean, the COD reduces the impact of extreme values on the assessment of equity and uniformity, making it a more reliable measure in appraisal practices.

This method provides insights into the consistency of assessments—lower values indicate better uniformity, while higher values suggest greater variability in property valuations. This is crucial for appraisers assessing the fairness in property taxation and ensuring that similar properties are assessed at similar values.