The statistic that measures regressivity is known as which of the following?

The statistic that measures regressivity is known as which of the following?

• A. Price related differential
• B. Coefficient of variation
• C. Interquartile range
• D. Gini coefficient

Answer: (A)

This question centers on how to detect whether assessment bias changes with property value. The Price Related Differential is the statistic that directly compares how much of market value properties of different value ranges are being assessed. If the average assessment percentage is similar across low- and high-value properties, the differential is around 1, indicating no regressivity. If lower-valued properties are assessed at a higher percentage of their market value than higher-valued ones, the differential deviates from 1 in the regressivity direction, signaling that taxes fall more heavily as a share of value on poorer or smaller properties. That direct link to how assessment level varies with price is why the Price Related Differential is the best choice for measuring regressivity. The coefficient of variation and interquartile range describe how spread out the assessment ratios are, not how those ratios change as property value changes. The Gini coefficient measures inequality in a distribution (often income), not the relationship between price and assessment level.

This question centers on how to detect whether assessment bias changes with property value. The Price Related Differential is the statistic that directly compares how much of market value properties of different value ranges are being assessed. If the average assessment percentage is similar across low- and high-value properties, the differential is around 1, indicating no regressivity. If lower-valued properties are assessed at a higher percentage of their market value than higher-valued ones, the differential deviates from 1 in the regressivity direction, signaling that taxes fall more heavily as a share of value on poorer or smaller properties. That direct link to how assessment level varies with price is why the Price Related Differential is the best choice for measuring regressivity.

The coefficient of variation and interquartile range describe how spread out the assessment ratios are, not how those ratios change as property value changes. The Gini coefficient measures inequality in a distribution (often income), not the relationship between price and assessment level.