How is the Mean Ratio calculated?

The Mean Ratio is calculated by taking the sum of all the individual ratios in a dataset and then dividing that sum by the total number of ratios. This method effectively provides an average that represents the central tendency of the ratios, giving appraisers a clear understanding of the typical relationship between two variables, such as assessed values to sale prices.

This calculation is essential for appraisal purposes, as it helps in analyzing the accuracy of property assessments. By obtaining the Mean Ratio, appraisers can assess how well the market has been represented in the assessments and identify any patterns or discrepancies in valuation.

Other options, while they may represent different statistical measures, do not correctly define the calculation of the Mean Ratio. The highest ratio pertains to the maximum value in the dataset, the middle value relates to the median, and the total of assessments divided by the number of sales could be indicative of a different calculation unrelated to the Mean Ratio. Each of these options lacks the proper methodology that defines how a Mean Ratio is specifically determined.