When median and mean ratios stratified by heating type are around one, this stratification indicates good which type of equity?

When median and mean ratios stratified by heating type are around one, this stratification indicates good which type of equity?

• A. Horizontal
• B. Vertical
• C. Diagonal
• D. Systemic

Answer: (A)

Horizontal equity is being tested here. When the ratio of assessed value to market value is examined across different heating types and the medians and means are around 1 in each group, it shows that similar properties are being valued proportionally no matter what heating system they use. This means there isn’t a systematic bias based on heating type, so property taxes are levied fairly for property characteristics that are considered equal in value. Vertical equity would involve different treatment by ability to pay or value levels, which this scenario doesn’t address.

Horizontal equity is being tested here. When the ratio of assessed value to market value is examined across different heating types and the medians and means are around 1 in each group, it shows that similar properties are being valued proportionally no matter what heating system they use. This means there isn’t a systematic bias based on heating type, so property taxes are levied fairly for property characteristics that are considered equal in value. Vertical equity would involve different treatment by ability to pay or value levels, which this scenario doesn’t address.