Which two primary sets of statistics are utilized in analyzing sales ratios?

The use of measures of central tendency and measures of dispersion is essential in analyzing sales ratios, as they provide a comprehensive understanding of the data gathered from property sales.

Measures of central tendency, such as mean, median, and mode, give an overview of the typical value within the dataset. This is crucial for appraisers to identify the average sales ratio, which helps in assessing how properties are valued in comparison to their market prices.

On the other hand, measures of dispersion, including range, variance, and standard deviation, describe the spread or variability of the sales ratios. They indicate how consistent or varied the sales ratios are within the dataset, which is important for understanding the reliability of the average value derived from the measures of central tendency. A narrow dispersion suggests that the sales ratios are closely grouped around the mean, which can reflect a healthy market where properties are uniformly assessed. Conversely, a wide dispersion may indicate discrepancies in property valuations or market instability.

This combination of analyzing both the central tendency and the dispersion allows appraisers to draw more accurate conclusions and make informed decisions regarding property assessments. Understanding these statistical concepts is crucial in the mass appraisal process, facilitating fair and equitable property valuations.