Measures of Dispersion

Course Number: STA 240

Course Name: Statistics
Course Instructor: Tamanna Siddiqua
Ratna .
(Lecturer )
Learning Objectives:
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 Definition of measures of dispersion;

 Importance of studying measures of dispersions;

 Methods of studying dispersion;

 Calculate common measures of dispersion from

grouped and ungrouped data (Range, Quartiles,
Variance, Standard Deviation);
 Calculate and interpret the Coefficient of Variation.
 Definition
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 In statistics, dispersion (also called variability, scatter,

or spread) is the extent to which a distribution is
stretched or squeezed.

 The measure of dispersion/ variation shows how

the data is spread or scattered around the mean.
 Why we need to study
dispersion? 4

A measure of location, such as the mean or the

median, only describes the center of the data. It
is valuable from that standpoint, but it does not
tell us anything about the spread of the data.
That’s why we need to study the measures of
dispersion.
 What actually Dispersion Explain
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 Measures of dispersion are descriptive statistics

that describe how similar a set of scores are to
each other
The more similar the scores are to each other,
the lower the measure of dispersion will be.
The less similar the scores are to each other,
the higher the measure of dispersion will be.
 Significance of measuring variation
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Measures of variation are needed for four basic

purposes:
i. To determine the reliability of an average;
ii. To serve as a basis for the control of the variability;
iii. To compare two or more series with regard to
their variability; and
iv. To facilitate the use of other statistical measures.
 Methods of studying variation
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 Range
 Variance
 Standard Deviation (SD)
 Mean Deviation (MD)
 Coefficient of Variation (CV)
 Interquartile Range or Quartile Variation
 Range

 The simplest measure of dispersion is the range. It is the

difference between the largest and the smallest values in a data
set. In the form of an equation:

Range= Largest value – Smallest value= L - S

Example:

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Range = 14- 1 = 13

Chap 3-8
The major characteristics & uses of the range are:
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Characteristics of Range:
 Only two values are used in its calculation.
 It is influenced by extreme values.
 It is easy to compute and to understand.

Uses of Range:
•Quality control
•Fluctuation in the share prices
•Weather forecasts.
 Variance
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 Variance is a measurement of the spread between

numbers in a data set.
 It measures how far each number in the set is from
the mean .
 Shortly, we can define that, variance is the mean of
the squared deviations from the arithmetic mean.
 Population Variance is noted by σ2 and Sample
variance is noted by S2.
 Formula of Variance for Ungrouped data
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Population Sample

 (X
n
 μ)  i
2
i (X  X ) 2

σ2  i 1
S2  i 1
N n -1
Where,
Where,
μ = arithmetic population mean
X = arithmetic sample mean
N = population size
n = sample size
Xi = ith value of the variable X
Xi = ith value of the variable X
 Formula of Variance for Grouped data
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Population Sample
N

 i
N

 i  2
f (X  μ) 2
f (X X )
σ2  i 1
S2  i 1
N n -1
Where,
Where,
μ = arithmetic population mean
X = arithmetic sample mean
N = population size n = sample size
Xi = ith value of the variable X Xi = ith value of the variable X
f= corresponding frequency of f= corresponding frequency of
variable X variable X
 Standard Deviation (SD) : For ungrouped data
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 The square root of the population variance is the population

standard deviation.
N

 i
(X  μ) 2

σ i 1
N

 The square root of the sample variance is the sample

standard deviation.
n

 i
(X  X ) 2

S i 1
n -1
 Standard Deviation (SD) : For grouped data
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• The formula for the population standard deviation is:

(grouped data)
N

 i
f (X  μ) 2

σ i 1
N
• The formula for the sample standard deviation is: (grouped
data)
N

 i
f (X  X ) 2

S i 1

n -1
 Comparison Between Variance and SD
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All observations are used in the calculation in

both measures.
It is not unduly influenced by extreme
observations in both cases.
The units are somewhat difficult to work in
variance because they are the original units
squared. But in SD we don’t have such type of
problem.
 Problem
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1. The hourly wage (in taka) of 6 workers of a

company are,
200, 210, 250, 230, 240
a) Determine the average hourly wage.
b) calculate the Variance of the hourly salary.
c) Determine the Standard Deviation (SD) of
hourly Salary.
 Problem
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2. Determine the average marks and Standard

Deviation (SD) of the given dataset.

Marks No of Students
40-50 12
50-60 10
60-70 8
70-80 7
Total 37
 Hints to solve Problem 2
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Required table preview,

Marks No of Mid f i xi (xi -X)2 fi(xi -X)2
Students, value,
fi xi

40-50 12
50-60 10
60-70 8
70-80 7
Total 37

**Put the required column sum to the formula of AM and SD.

 Coefficient of Variation (CV)
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 The coefficient of variation (CV) is a measure of relative
variability. It is the ratio of the standard deviation to the mean
(average). It is usually expressed in percentage.
CV for a population: 
CV  100%
Here, 
 is the population standard deviation and  is the population
mean.
CV for a sample: S
CV  100%
Here, x
S is the sample standard deviation and x bar is the sample mean.
 Characteristics
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 Measures relative variation

 Always in percentage (%)
 Shows variation relative to mean
 Can be used to compare the variability of
two or more sets of data measured in
different units
 Example
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 Stock A:
 Average price last year = $50
 Standard deviation = $5

 Stock B:
 Average price last year = $100
 Standard deviation = $5

Calculate coefficient of variation for each stock and compare

them.
 S  $5  S  $5
CVA    100% 
 100%  10% CVB    100% 
 100%  5%
X  $50 X  $100

Both stocks have the same standard deviation, but stock B is less
variability relative to its price
 Problem
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3. Following are the information about the 1st term

exam of two sections of STA-240 course.
Average SD of Marks
Marks
Section- A 86 10
Section - F 92 13
a) Use appropriate statistical tool to compare two
section.
b) Interpret the calculated values in (a).
 Hints of problem 3
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** Write down the given ** Write down the given

information of section A information of section F

**Then calculate CV of Section A, **Then calculate CV of Section F,

Interpretation of (b) will be briefly discussed in class.

 Problem
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4. The average weekly wage in a factory had increased

from Tk 8000 to Tk 12000 as a result of negotiation
between the employees and the employer. Alongside,
the standard deviation had decreased from Tk 150 to
Tk 100. Conclude the resulting distribution of
income after negotiation by using appropriate
statistical tool.
Thanks
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