Coefficient of Dispersion (COD)

The Director's Ratio tells you one number: on average, how a town's Assessed Values compare to actual sale prices. But an average can hide a lot. A town could average 80% — looking perfectly reasonable — while some homes are assessed at 60% of what they'd sell for and others at 105%, with the extremes canceling out in the townwide number. The Coefficient of Dispersion (COD) is the check on that: it measures how much individual properties' assessment ratios typically vary from the townwide average, not just what the average is.

Think of it as a fairness score rather than an accuracy score. The Director's Ratio asks "are assessments stale townwide?" The COD asks "are assessments applied consistently from one house to the next?" A town can have a healthy Director's Ratio and still have a high COD — meaning some owners are effectively paying more than their fair share relative to a similar neighbor's house, and others less, even though the town's overall numbers look fine.

New Jersey uses the same threshold the assessing profession's national standards body (the International Association of Assessing Officers, or IAAO) recommends: a COD of 15 or below generally indicates assessments are applied uniformly. Above 15, state regulation (N.J.A.C. 18:12A-1.14) lists it as one of several factors a county board of taxation can weigh — alongside the Director's Ratio — when deciding whether to order or approve a townwide reassessment. Neither number triggers a reassessment on its own; a board reviews the full picture, including how long it's been since the last one.