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About IDOR

About IDOR

Table 3, Final Equalization Factors

The department is required to provide an equalization factor for each county that will equalize the level of assessment at the statutory level of 33 1/3 percent of the fair cash value. The level of assessment to be equalized is the mean, or average, of the urban-weighted medians of the three years immediately preceding the assessment year, after adjustment for assessment changes through the current assessment year.

The urban-weighted levels of assessment for the three years involved in the calculation of the equalization factor are shown in Columns 2 through 4. These levels have been adjusted for assessment changes, including those made by any board of review for the current assessment year. Column 5 indicates the mean of the urban-weighted medians for the three years. Column 6 shows the final equalization factor and Column 7 shows the equalized level of assessment.

Formulas for Sales Ratio Studies and Equalization

Sales Ratio =
Prior Year Assessed Value
Current Year Sale Price
X     100%
Coefficient of Dispersion (COD) =
Average Deviation
Median
X     100%
Median Absolute Deviation (MAD) =
Median Deviation
Median of Sales Ratios
X     100%
Coefficient of Concentration (COC) =
Number of Sales Ratios within 10% of the median
Total Number of Sales Ratios
Price-Related Differential (PRD)
          Sales-Based Average Ratio =
Sum of Assessed Values
Sum of Sales Prices
X     100%
          Mean Assessment Ratio =
Sum of the Sales Ratios
Number of Ratios
          Price-Related Differential =
Mean Assessment Ratio
Sales-Based Average Ratio
Equalization Factor =
Desired Level (33.33%)
Prior 3-Year Average Median Level

Examples of Statistical Calculations

Distribution of sales ratios

Assessment Sale price Sales
Ratio
Absolute
deviation from
the median
$ 9,000 ÷ $ 45,000 = 20% 15
6,000 ÷ 30,000 = 20% 15
9,000 ÷ 30,000 = 30% 5
7,500 ÷ 25,000 = 30% 5
7,000 ÷ 20,000 = 35% 0
7,000 ÷ 20,000 = 35% 0
6,000 ÷ 15,000 = 40% 5
4,500 ÷ 10,000 = 45% 10
7,500 ÷ 15,000 = 50% 15
5,000 ÷ 10,000 = 50% 35
Total      $68,500 $220,000 355% 85

Calculations

(derived from above data)

Number of Transfers:   10    
Median: 35 + 35
2
= 35%  
First Quartile:   30% Third Quartile: 45%
Lowest ratio:   20% Highest ratio: 50%
Range: (50% - 20%) = 30%  

Coefficient of Dispersion (COD)

Sum of absolute deviations from the median: 85
Average absolute deviation: 85 ÷ 10 = 8.5
COD:
Average absolute deviation
Median
= 8.5 ÷ 35% = 24.3%