Which ratio calculation indicates how assessed values relate to market values?

The Price Related Differential (PRD) is a sophisticated measure used to assess the relationship between assessed values and market values in real property appraisal. It helps to evaluate fairness and equity in property taxation by quantifying whether the assessment procedure is systematically skewed towards higher or lower valued properties.

The PRD focuses on how well the assessed values reflect the actual market values across different properties. A PRD value of 1 indicates that assessed values are generally equal to market values, while values above or below 1 can indicate inequality in the assessments. A PRD significantly over 1 may suggest that higher-valued properties are assessed more favorably than lower-valued properties, which can lead to disparities in tax burdens.

The other options, while relevant in the context of appraisal and assessment, do not specifically indicate the relationship between assessed values and market values as directly as the PRD does. The Coefficient of Dispersion (COD) measures the variability of assessed values and how uniformly they are distributed, but it doesn’t reflect the direct relationship with market values. The Aggregate Ratio provides an overall assessment ratio but lacks the nuanced insights provided by the PRD. The Mean Ratio gives an average of assessed values to market values but doesn’t capture the broader systemic comparisons that PR