Chapter 5

Measures of Dispersion

Measure of Variation:
A measure of variation is designed to state the extent to which the observations vary from
averages.
Significance of measuring variation:
• To determine the reliability of an average.
• To serve as a basis for control of the variability
• To compare two or more series with regard to their variability.
• To facilitate the use of other statistical measure.
Methods of studying variation:
➢ Absolute Measure of variation
➢ Relative Measure of variation
Absolute Measure of Variation:
➢ It is expressed in some statistical unit in which the original data are given such as rupees,
kilograms, tones etc.
➢ These measures cannot be used to compare the variations between two different series.
➢ Different absolute measures are:
• Range (R)
• Quartile Deviation (QD)
• Average Deviation (AD)
• Standard Deviation (SD)
Relative Measure of Variation:
➢ Are not expressed in units but it is a pure number
➢ It is the ratio of a measure of absolute variation to an average.
➢ Different Relative measures Are:
• Coefficient of Range
• Coefficient of QD
• Coefficient of AD
• Coefficient of SD or Coefficient of variation
Definition of different types of measure of variation:

a) Range: The difference between the lowest and highest values. In {4, 6, 9, 3, 7} the
lowest value is 3, and the highest is 9, so the range is 9 − 3 = 6.
The relative measure corresponding to range, called the coefficient of range, is obtained by
applying the following formula:
• Coefficient of Range= (L- S)/ (L S)
Merits of Range:
1. It is simple to understand and easy to calculate.
2. It is less time consuming.
Demerits of Range:
1. It is not based on each and every item of the distribution.
2. It is very much affected by the extreme values.
3. The value of Range is affected more by sampling fluctuations
 b) Quartile deviation: Quartiles in statistics are values that divide your data into quarters.
They divide your data into four segments according to where the numbers fall on
the number line. The four quarters that divide a data set into quartiles are:
• The lowest 25% of numbers which is termed as Q1
• The next lowest 25% of numbers (up to the median) which is termed as Q2
• The second highest 25% of numbers (above the median) which is termed as Q3
• The highest 25% of numbers which is termed as Q4
The Quartile Deviation (QD) is the product of half of the difference between the upper
and lower quartiles. Mathematically we can define as:
Quartile Deviation = (Q3 – Q1) / 2
Merits of Quartile Deviation:
1. It can be easily calculated and simply understood.
2. It does not involve much mathematical difficulties.
3. As it takes middle 50% terms hence it is a measure better than Range.
4. It is not affected by extreme terms as 25% of upper and 25% of lower terms are left out.
5. Quartile Deviation also provides a short cut method to calculate Standard Deviation using
the formula 6 Q.D. = 5 M.D. = 4 S.D.
6. In case we are to deal with the center half of a series this is the best measure to use.
Demerits or Limitation Quartile Deviation:
1. As Q1 and Q3 are both positional measures hence are not capable of further algebraic
treatment.
2. Calculation are much more, but the result obtained is not of much importance.
3. It is too much affected by fluctuations of samples
4. Not give reliable result.
5. If the values are irregular, then result is affected badly.

c) Average or mean deviation: a measure of dispersion, computed by taking the arithmetic

mean of the absolute values of the deviations of the functional values from some central
value, usually the mean or median. MD is an absolute measure of dispersion. The relative
measure corresponding to MD, called the coefficient of MD, is obtained by dividing
mean deviation by the particular average used in computing mean deviation. Thus, if MD
has been computed from median, the coefficient of mean deviation shall be obtained by
dividing MD by median.
• Coefficient of Mean Deviation = MD/ (Mean or Median)

Merits of Mean Deviation:

1. It is simple to understand and easy to compute.
2. It is based on each and every item of the data.
3. MD is less affected by the values of extreme items than the Standard deviation.
Demerits of Mean Deviation:
1. The greatest drawback of this method is that algebraic signs are ignored while taking the
deviations of the items.
2. It is not capable of further algebraic treatments.
3. It is much less popular as compared to standard deviation.
 d) Variance:
Variance (σ2) in statistics is a measurement of the spread between numbers in a data set. That is,
it measures how far each number in the set is from the mean and therefore from every other
number in the set. Variance is calculated by taking the differences between each number in the
data set and the mean, then squaring the differences to make them positive, and finally dividing
the sum of the squares by the number of values in the data set.

e) Standard deviation: The standard deviation is a statistic that measures the dispersion of
a dataset relative to its mean and is calculated as the square root of the variance. It
is calculated as the square root of variance by determining the variation between each
data point relative to the mean. If the data points are further from the mean, there is a
higher deviation within the data set; thus, the more spread out the data, the higher the
standard deviation
Merits:
• It is rigidly defined
• It is based on all the observations of the series and hence it is representative.
• It is amenable to further algebraic treatment.
• It is least affected by fluctuations of sampling.
Demerits:
• It is more affected by extreme items.
• It cannot be exactly calculated for a distribution with open-ended classes.
• It is relatively difficult to calculate and understand.

Coefficient of variation-
Coefficient of variation is standardized measure of dispersion of a probability/frequency
distribution. It’s given by formula:
Coefficient of variation= standard deviation / mean × 100

Merits-
1) It represents the ratio of the standard deviation to the mean
2) Compares variation from one distribution to another.
3) It’s unit less and dimensionless variable

Some problems:
 1. Calculate the mean deviation from the following distribution:
Salary (in 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-100
tk)
No. of 4 6 8 12 7 6 4 3
employees
2. Calculate the mean deviation from the following distribution:
Marks 20 30 40 50 60 70 80 90 100
No. of 2 4 8 10 8 4 2 1 1
students
3. Calculate average deviation from mean from the following data:
Sales 10-20 20-30 30-40 40-50 50-60
No. of days 3 6 11 3 2
4. An analysis of production rejects resulted in the following figures:
No. of 20-25 25-30 30-35 35-40 40-45 45-50 50-55
rejects per
operator
No. of 5 15 28 42 15 12 3
operators
Calculate variance, standard deviation and CV.
5. The salary of 10 employees (in tk) in a factory is given below:
50 60 65 70 80 45 75 90 95 100
Calculate variance , standard deviation and CV.
6. Suppose that samples of polythene bags from two manufacturer A and B are tested by a
prospective buyer for bursting pressure, with the following pressure:
Bursting pressure 5-10 10-15 15-20 20-25 25-30 30-35
Number of A 2 9 29 54 11 5
Bags B 9 11 18 32 27 13

Which set of bags has the highest average bursting pressure? Which has more uniform pressure?
If prices are the same, which manufacturer’s bags would be preferred by the buyer? Why?