What does the Coefficient of Dispersion (COD) measure?

The Coefficient of Dispersion (COD) is specifically designed to measure the level of uniformity or variability in property assessments relative to market sales prices. It is calculated as the mean absolute deviation of assessments from a measure of central tendency, often the median, divided by that measure, typically expressed as a percentage.

When you choose the option that relates to the relationship between mean deviation and median, you are recognizing that the COD involves assessing how assessment values deviate from their central tendency (the median) within a given dataset. A lower COD value indicates a more uniform assessment ratio, which is essential for ensuring fairness in property taxation and the assessment process.

In contrast, other options refer to different concepts, making them not applicable to the definition of COD. The first option refers to a ratio but not in the context of assessing uniformity, while the third option speaks to total valuation rather than the evaluation of proportionality in assessments. Lastly, the fourth option merely mentions average sale prices without any connection to the comparative measure of fairness assessment that COD provides. This highlights why the second option accurately defines the Coefficient of Dispersion.