What is a helpful statistic to measure the accuracy of appraised values when determining if a reappraisal is necessary?

The coefficient of dispersion is a valuable statistic for assessing the accuracy of appraised values and determining the necessity for a reappraisal. It measures the uniformity of appraised values in relation to market values across a set of properties. A lower coefficient of dispersion indicates that the appraisals are closely aligned with market values, suggesting a more accurate and equitable assessment. Conversely, a higher coefficient of dispersion signals greater variability and inconsistency in appraised values, which may necessitate a reappraisal to ensure fair taxation and property valuation.

In contrast, the median value index primarily focuses on the median ratio of appraised value to market value but doesn't account for the overall distribution of values, making it less comprehensive for determining fairness. Standard deviation of appraisals measures the extent to which appraised values vary from the mean, but it does not provide specific insights into the accuracy relative to market values like the coefficient of dispersion does. Rate of return analysis is more typically used in investment contexts assessing profitability rather than appraised value accuracy, which makes it less relevant in this context.