BRIEF OVERVIEW OF THE ANNUAL SALES RATIO ANALYSIS
DEFINITIONS OF IMPORTANT STATISTICS
The MEDIAN RATIO is the middle ratio in a sorted (low to high) array of sales ratios; 50% of the
ratios lie above the median and 50% fall below it. The median ratio is the most commonly used
point estimate because it is less influenced by outliers.
The MEDIAN RATIO CONFIDENCE INTERVAL provides the range in which the true
county median ratio is expected to fall. The confidence interval is a more reliable indicator of the
actual level of appraisal for all properties in the county, both sold (those used in the ratio study
sample), and unsold. The confidence level used by the WY State Board of Equalization is 95%.
The COEFFICIENT OF DISPERSION (COD) is the most common measure of uniformity in
sales ratio studies. It indicates how tightly the ratios are clustered around the median ratio. The
COD is a proportional measure found by taking the average of the absolute deviation of ratios
about the median, and dividing by the median ratio. The lower the COD, the greater uniformity in
appraised values.
The PRICE-RELATED DIFFERENTIAL (PRD) is used to measure value related inequities in
the appraisal system, referred to as regressivity or progressivity. Appraised values are regressive if
high value properties are under appraised relative to low value properties and progressive if high
value properties are over appraised relative to the low value properties. The PRD is found by taking
the mean (average) ratio of the sample and dividing by the weighted (aggregate) mean ratio.
RATIO STUDY STANDARDS
The calculated Median Ratio Confidence Interval must overlap the standard range.
The COD must be no greater than 15 for residential improved property and no more than 20.0 for
all other relevant classes.
The PRD must be between .98 and 1.03
The aggregate percentage change in sold property value must be no more than 5% higher or lower
than the aggregate percentage change in unsold property value.
EXAMPLES:
Johnson County Residential Sales Ratio
1.4
1.3
1.2
Sales Ratio = Appraised Value / Sales Price
1.1
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
Median:
COD:
0.97
8.38
Standard Range (.95,1.05)
Confidence Interval
Median
Teton County Commercial Sales Ratio
1.4
1.3
1.2
Sales Ratio = Appraised Value / Sales Price
1.1
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
Median:
COD:
0.65
40.42
Standard Range (.95,1.05)
Confidence Interval
Median
Statewide Residential Sales Ratios
1.40
Sales Ratio = Appraised Value / Sale Price
1.30
1.20
1.10
1.00
0.90
0.80
0.70
0.60
0.50
Median
COD
PRD
0.95
8.68
1.01
Standard Range (.95, 1.05)
Median
Confidence Interval