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CENTRAL TENDENCY |
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(1) The tendency of most kinds of data to cluster around some typical or central value, such as the mean, median, or mode.
(2) By extension, any or all such statistics.
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CHARACTERISTICS-BASED MARKET ADJUSTMENT |
| A market adjustment model which uses
previous assessed value along with property characteristics. The basic model form
is Sale Price = Prior Year Assessed Value * (1 / factor 0 + (factor1 * Char 1) + (factor2 * Char2)…+(factorN*CharN) ),
where Char1 and so on are items such as building grade, lot size and so forth. The influence
of these characteristics must be statistically significant over and above any statistical
relationship the prior year assessed value bears on sales prices.
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COEFFICIENT OF DISPERSION (COD) |
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The average deviation of a group of numbers from the median expressed as a
percentage of the median. In ratio studies, the average percentage deviation from
the median ratio. It is a measure of uniformity.
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COEFFICIENT OF VARIATION (COV) |
| A standard statistical
measure of the relative dispersion of the sample data about the mean of the data;
the standard deviation expressed as a percentage of the mean.
It is a measure of uniformity.
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COEFFICIENT |
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(1) In a mathematical expression, a number or letter preceding and multiplying another
quantity. For example, in the expression, 5X, 5 is the coefficient of X, and in the
expression aY, a is the coefficient of Y. (2) A dimensionless statistic, useful as
a measure of change or relationship; for example, correlation coefficient.
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COMPARABLES SALES; COMPARABLES |
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(1) Recently sold properties that are similar in important respects to a property
being appraised. The sale price and the physical, functional, and locational
characteristics of each of the properties are compared to those of the property
being appraised in order to arrive at an estimate of value.
(2) By extension, the term "comparables" is sometimes used to refer to properties
with rent or income patterns comparable to those of a property being appraised.
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CONFIDENCE INTERVAL |
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For a given confidence level, the range within which one can conclude that a
measure of the population (such as the median or mean appraisal ratio) lies.
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CONFIDENCE LEVEL |
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The required degree of confidence in a statistical test or confidence interval;
commonly 90, 95, or 99 percent. A 95 percent confidence interval would mean, for
example, that one can be 95 percent confident that the population measure (such as
the median or mean appraisal ratio) falls in the indicated range. It is a measure
of assessment reliability.
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CORRELATION |
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A statistical phenomenon (and a technique for estimating its strength) whereby
knowledge of one fact about a thing implies some knowledge of a second fact about
that thing. For example, because the volume and weight of water are correlated,
knowing that a quantity of water is one gallon also means knowing that its weight
is eight and one-third pounds. Linear correlation, the kind most often encountered,
means that an increase in one factor
in some proportion (say, a doubling) changes the other in the same proportion.
With curvilinear correlation, as between the radius and the area of a circle,
this is not true, despite the fact that the correlation may be very strong in
the sense that knowledge of one fact tells you precisely the other fact. These are
examples of variables perfectly correlated or nearly so; more often, correlation is
only partial – for example, the correlation between the age and height of a child.
The correlation coefficient gives the strength of the linear relationship between the
two variables.
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COST APPROACH |
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One of the three approaches to value, the cost approach is based
on the principle of substitution – that a rational, informed purchaser would pay no more
for a property than the cost of building an acceptable substitute with utility. The cost
approach seeks to determine the replacement cost new of an improvement less depreciation
plus land value.
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