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Chapter 5

Measures of Dispersion

Synonym for variability

Often called ³spread´ or ³scatter´

Indicator of consistency among a data set

Indicates how close data are clustered about

a measure of central tendency

Why Study Dispersion?

A small value for a measure of dispersion indicates that the data

are clustered closely (the mean is therefore representative of the data)

A large measure of dispersion indicates that the mean is not

reliable (it is not representative of the data)

48 49 50 51 52 47 53

Daily Computer Production

53 55 56 54 48 49 50 51 52 47 46 45 44

Daily Computer Production

Purpose of Measuring Variation

To test the reliability of an average

To serve as a basis for control of variability

To compare two or more series with regard

to variability

To facilitate as a basis for further statistical

analysis.

Properties of a good measure of variation

It should be simple to understand and easy

to calculate.

It should be rigidly defined.

It should be based on all observations.

It should be amenable to further algebraic

treatment.

It must have sampling stability.

It should not be affected by extreme

observations.

Absolute and relative measurement

Commonly used measures of dispersion

Range

Interquartile Range

Mean Deviation

Standard Deviation

The Range

The simplest measure of dispersion is the range.

Indicates how spread out the data are

For ungrouped data, the range is the difference

between the highest and lowest values in a set of

data.

RANGE = Highest Value - Lowest Value

Dependent on two extreme values

Coefficient of Range

Ratio of range

Coefficient of range =(Max- Min )/ (Max + Min)

The Range Example

RANGE = Highest Value - Lowest Value

EXAMPLE: A sample of five accounting

graduates revealed the following starting salaries:

$22,000, $28,000, $31,000, $23,000, $24,000.

The range is $31,000 - $22,000 = $9,000.

Dispersion Example

Number of minutes 20

clients waited to see a

consultant

Consultant

X Y

05 15 11 12

12 03 10 13

04 19 11 10

37 11 09 13

06 34 09 11

Consultant X:

Sees some clients almost

immediately

Others wait over 1/2 hour

Highly inconsistent

Consultant Y:

Clients wait about 10 minutes

9 minutes least wait and 13

minutes most

Highly consistent

Solution

1.Coefficient of range

=(Max- Min )/ (Max + Min)

= (37- 03 )/ (37 + 03) = 34/40 = 0.85

2. Coefficient of range

=(Max- Min )/ (Max + Min)

= (13- 09 )/ (13 + 09) = 4/22 = 0.18

Consultant X is inconsistent and Consultant Y is

consistent in their job..

The Interquartile Range

Modified version of the range

Positional measure of dispersion

Range of the middle 50% of observation , scores or ranks

Advantages over the range:

Not sensitive to extreme values in a data set

Not sensitive to the sample size

Calculation:

Put the values in order from low to high

Divide the set of values into quarters (1/4s)

For the values in the middle 50% -- subtract the lower

value from the higher value i.e Q

3

± Q

1

Interquartile Range

Interquartile range = Q

3

± Q

1

Semi-interquartile range or quartile deviation is

defined as

= (Q

3

± Q

1

)/2

Coefficient of quartile deviation is

= = (Q

3

± Q

1

)/(Q

3

+ Q

1

)

Interquartile Range Example

The number of complaints received by the manager of a

supermarket was recorded for each of the last 10

working days.

21, 15, 18, 5, 10, 17, 21, 19, 25 & 28

Sorted data

5, 10, 15, 17, 18, 19, 21, 21, 25 & 28

n Observatio or Q

Q

n

Q

rd

3 75 . 2

4

11

4

1

1

1

1

!

!

!

n Observatio or Q

Q

n

Q

th

8 25 . 8

4

33

4

1 3

3

3

3

!

!

!

Interquartile range = 21 ± 15 = 6 days

For continuous data: one can use a graph:

15

Using an Ogive:

X

CF

20 40 60 80 100

20

40

60

80

100

x

x

x

Ogive

N/2 = 50

First Quartile at N/4

Q

1

Third Quartile at 3N/4

Q

3

Calculating exactly:Q1

Using the formula:

16

X f CF

0 < 20 15 15

20 < 40 60 75

40 <100 25 100

N/4 = 25

th

item

This is in the group 20 < 40

Lower limit (l) is 20

Width of group (i) is 20

Frequency of group (f) is 60

CF of previous group (F) is 15

Formula is:

¦

¦

'

+

'

!

f

F N

i l Q

q

4

1 1

First Quartile

¦

'

+

'

!

60

15 25

20 20

1

Q

60

10

20 20 v ! 333 . 3 20 !

= 23.3333

This means that 25% of the data is below 23.333 (p.133- q.9)

Width of group (i) is 20

CF of previous group (F) is 15

Q3

17

Third Quartile

This is in the group 20 < 40

Lower limit (l) is 20

Width of group (i) is 20

Frequency of group (f) is 60

CF of previous group (F) is 15

X f CF

0 < 20 15 15

20 < 40 60 75

40 <100 25 100

3N/4 = 75

th

item

Formula is:

¦

¦

'

+

'

!

f

F N

i l Q

q

4 3

3 3

¦

'

+

'

!

60

15 75

20 20

3

Q

60

60

20 20 v ! 20 20 !

= 40

So 25% of the data is above this point( i. e 40).

Interquartile Range and Coefficient of Q. D.

Interquartile range = 40-23.333= 16.67

1

Semi-interquartile range or quartile deviation is

defined as

= (Q

3

± Q

1

)/2 = 16.67/2 =8.335

Coefficient of quartile deviation is

= = (Q

3

± Q

1

)/(Q

3

+ Q

1

) = 16.67/ 63.33 = 0.26

Mean Deviation

The mean deviation takes into consideration all of

the values.

Mean Deviation: The arithmetic mean of the

absolute values of the deviations from the mean,

median or mode .

Where: X = the value of each observation X = the arithmetic mean of the values

n = the number of observations || = the absolute value (the signs of the deviations are disregarded)

n

x x

MD

§

!

Mean Deviation Example

The weights of a sample of crates containing

books for the bookstore are (in kgs.) 103, 97, 101,

106, 103.

X = 510/5 = 102 kgs.

|x-x| = 1+5+1+4+1=12

MD = 12/5 = 2.4 kgs

Typically, the variation in weights of the crates are

2.4 kgs. from the mean weight of 102 kgs.

7

If the data are in the form of a frequency

distribution, the mean deviation can be calculated

using the following formula:

Where: f = the frequency of an observation x

n = 7f = the sum of the frequencies

Frequency Distribution Mean Deviation

§

§

!

f

x x f

MD

_

| |

Frequency Distribution MD Example

Exercise 13.3(f) p. 336

Number of

outstanding

accounts

Frequency fx |x-x| f|x-x|

0 1 0 2 2

1 9 9 1 9

2 7 14 0 0

3 3 9 1 3

4 4 16 2 8

Total: N = 24

7fx = 48 7 f|x-x| = 22

mean = 48/24 = 2

MD = 22/24 = 0.92

§

§

!

f

x x f

_

| |

§

§

!

f

fx

x

_

x

Example 3:

Calculate mean deviation from median and mode of the

given data :

Class ±Interval Frequency

2-4 3

4-6 4

6-8 2

8-10 1

Standard Deviation

Standard deviation is the most commonly used

measure of dispersion

Similar to the mean deviation, the standard

deviation takes into account the value of every

observation

The values of the mean deviation and the standard

deviation should be relatively similar

Standard Deviation

The population standard deviation uses the squares

of the residuals

Steps;

Find the sum of the squares of the residuals

Find the mean

Then take the square root of the mean

Formula:

n

x x

§

¦

'

+

'

!

2

_

ı

The Standard Deviation (S or SD)

Most frequently used measure of dispersion

It is the average of the distances of the observed values

from the mean value for a set of data

Basic rule -- more spread will yield a larger SD

Calculation:

Calculate the arithmetic mean (AM)

Subtract each individual value from the AM

Square each value -- multiply it times itself

Sum (total) the squared values

Divide the total by the number of values (N)

Calculate the square root of the value

SD =

Sum of squares of individual deviations from arithmetic mean

Number of items

Example

:

Scores

Deviations

From Mean

Squares of

Deviations

01

03

05

06

11

12

15

19

34

37

143

-13

-11

-09

-08

-03

-02

+01

+05

+20

+23

169

121

81

64

9

4

1

25

400

529

1403

M = 143/10 = 14

No. of scores = 10

SD =

1403

10

= 11.8

SD =

Sum of squares of individual deviations from arithmetic mean

Number of items

Example

:

Scores

Deviations

From Mean

Squares of

Deviations

09

09

10

10

11

11

11

12

13

13

109

-02

-02

-01

-01

00

00

00

+01

+02

+02

4

4

1

1

0

0

0

1

4

4

19

M = 109/10 = 11

No. of scores = 10

SD =

19

10

= 1.4

The Coefficient of Variation

The coefficient of variation is a measure of

relative variability

It is used to measure the changes that have taken place

in a population over time

To compare the variability of two populations that are

expressed in different units of measurement

It is expressed as a percentage

Formula:

Where:

X = the mean of the sample S D = the standard deviation of the sample

.

100

_

¦

¦

'

+

'

!

x

d s

V

Exercise2

A Quality Control

Laboratory received

samples of electric bulbs

for testing the lives, from

two suppliers. The results

were as follows:

i) Which company¶s bulbs

have the greater length of

life.

ii) Which company¶s bulbs

have the greater length of

life.

Length of

Life(in

hrs.)

Company

A

Company

B

1500 ±

2000

16 18

2000 ±

2500

26 22

2500 ±

3000

8 8

Total

50 48

Solution

Length of

Life(in hrs.)

Middle Point

(xi )

Company A

(fi )

Company B

(fi )

1500 ± 2000 1750 16 18

2000 ± 2500 2250 26 22

2500 ± 3000 2750 8 8

Total 50 48

Company A

Basic Statistics

Sum( fx) 108,500.00

Count (Sum f) 50.00

Arithmetic Mean 2,170.00

Standard Deviation 337.05

Variance 113,600.00

Coefficient of Variation 16%

Company B

Basic Statistics

Sum(fx) 103,000.00

Count (Sum f) 48.00

Arithmetic Mean 2,145.83

Standard Deviation 352.94

Variance 124,565.97

Coefficient of Variation 16%

Answer

(i) Bulbs of Company A (mean 2170) have more

life than those of Company B (mean 2145)

(ii) Both Companies are same for uniformity (CV

16%)

Combined Variance (For different means)

W

2 1

2

2

2

2 2

2

1

2

1 1

) ( ) (

n n

d n d n

!

W W

W

Exercise 3

The mean and s.d of the µlives¶ of tyres of manufactured by

two factories of µDurable¶ tyre company, making 50,000

tyres annually , at each of the two factories , are given

below. Calculate combined mean and standard deviation of

the µlife¶ of all the 100000 tyres produced in a year.

Factory Sample Size Mean (µ000 Kms) SD (µ000 Kms)

1 50 60 8

2 50 50 7

Combined Variance (For same means)

2 1

2

2 2

2

1 1

n n

n n

!

W W

W

Choosing Measures of Dispersion

Range

Interquartile Range

Use the range sparingly as the

measure of dispersion

Median is measure of central

tendency -- use the interquartile

range

Mean is measure of central

tendency -- use the standard

deviation

Standard

Deviation

Relationship between measures of

dispersion

Mean deviation = (4/5) standard deviation

Quartile deviation = (2/3) standard deviation

-1 +1

2.2

9.6

14

11

25.8

12.4

68%

NORMAL DISTRIBUTION CURVE

1 Standard Deviation

-2 +2

01

8.2

14

11

37

13.8

95%

NORMAL DISTRIBUTION CURVE

2 Standard Deviations

NORMAL DISTRIBUTION CURVE

3 Standard Deviations

-3

+3

01

6.8

14

11

37

15.2

99.7%

Q

1W

Q2W QlW Q QlW Q2W

Q

1W

Bell - Shaped Curve showing the relationship between and . W Q

68%

95%

99.7%

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