Section 50IAC27-5-5. Outlier ratios

   (a) Outlier ratios are very low or high ratios as compared with other ratios in the sample. One (1) extreme outlier can have a controlling influence over some statistical measures. Outlier ratios can result from an erroneous sale price, a nonmarket sale, unusual market variability, a mismatch between property sold and the property assessed, and other reasons listed in the IAAO Standard on Ratio Studies, Standard 5.2 (July 2007), as incorporated by reference in 50 IAC 27-1-4.

  (b) The preferred method of handling an outlier ratio is to subject it to additional scrutiny to determine whether the sale is a nonmarket transaction or contains an error in fact. If the error can be corrected, for example, data entry error, the property should be kept in the sample. If the error cannot be corrected, if correction of the error would cause the identified outlier to no longer be representative of the population, or if inclusion of the identified outlier would reduce sample representativeness, the sale shall be excluded.

  (c) For guidelines on outlier identification and trimming, see the IAAO Standard on Ratio Studies, Appendix B (July 2007), as incorporated by reference in 50 IAC 27-1-4. (Department of Local Government Finance; 50 IAC 27-5-5; filed Apr 8, 2010, 1:45 p.m.: 20100505-IR-050090502FRA)