Market value–based assessment systems introduce objectivity and transparency into the assessment process by partially removing assessors’ bias while benchmarking assessed values against the recently sold properties. This article explores vertical equity of Indiana’s new market value–based assessment system over a decade of 2000s including the years of the housing crisis (2008–2010). Five methods are used to assess vertical equity of the system, including locally weighted and quantile regressions. The results demonstrate a significant increase in vertical inequity during the years of the housing crisis. Assessment regressivity is particularly acute at the tails of the ratio distribution: the least expensive properties are overassessed, while the most expensive ones are underassessed. While a self-regulating assessment system is yet to be discovered, I recommend reducing the time intervals between mass reassessments and introducing independent audits for properties that are most susceptible to overassessment and underassessment to remedy vertical inequity of the property tax.
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