RIZAL TECHNOLOGICAL UNIVERSITY

Cities of Mandaluyong and Pasig

WEEK 9 – 10

Module 4
Chapter 4: Variability

4.1 Introduction to Variability

4.2 Variance and Standard Deviation
4.2.1 Population Variance and Standard Deviation
4.2.2 Sample Variance and Standard Deviation
4.3 An Unbiased Statistic: Sample Variance
4.4 Beyond Variance and Standard Deviation

Overview

While measures of central tendency provide a useful summary of information about a list of
data, a single summary number by itself is not enough to provide a picture of the
distribution of a list (in the same way that a single word cannot fully describe someone).
Several lists of data may have the same mean, but the spread of the lists may be different.
Consider, for instance, the following data sets:

Set 1: 15 15 17 18 20
Set 2: 15 16 16 18 20
Set 3: 14 15 18 19 19

A measure of variability shows the extent to which numerical values tend to spread out over
the average. A suitable measure should be large when the values vary over a wide range and
should be small when the range of variation is not too great.

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Study Guide

1. Download or read and understand the module for Chapter 4.

2. Watch corresponding video lectures.
3. Answer the Assignment #2.

Learning Outcomes

LO1: Define variability and determine its use and importance as a statistical measure.

LO2: Calculate the variance and standard deviation both for ungrouped and grouped data.

LO3: Distinguish biased and unbiased statistics and clarify why the sample mean and the
sample variance are unbiased statistics.

LO4: Explain how adding and multiplying a constant affect the values of both the mean and
standard deviation.

4.1 Introduction to Variability

Variability in the context of statistics has also the same meaning as in everyday language
which implies that if objects are variable then they are not all similar. Statistically speaking,
variability is used to describe how scores spread or scatter. If in a given distribution all the
scores are the same, then it follows that scores have no variability. The greater the differences
are there in the distribution, the greater will be the amount of variability.

Variability is a quantitative objective measure that describes how scores scattered or

clustered together around the center of the data set.

Purposes:

1. It describes the distribution whether the distance of one score to another score is big
or small or how much is the expected distance of an individual score from the mean.
2. It measures how representative is an individual score with respect to the population
to provide for the expected sampling error.

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Measures of Variability (Ungrouped Data)

1. Range
2. Variance
3. Standard Deviation

The Range

Range is the simplest form of measuring the variability of a distribution, which is equal to
the difference between the maximum and minimum quantitative data entries in the set.

𝑅𝑎𝑛𝑔𝑒 = (𝑀𝑎𝑥𝑖𝑚𝑢𝑚 𝑑𝑎𝑡𝑎 𝑒𝑛𝑡𝑟𝑦) − (𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑑𝑎𝑡𝑎 𝑒𝑛𝑡𝑟𝑦)

Example:

Starting Salaries (in thousands of dollars) 41, 38, 39, 45, 47, 41, 44, 41, 37, 42

Find the range of the starting salaries.

Solution: Ordering the data helps to find the least and greatest salaries.

37 38 39 41 41 41 42 44 45 47

Range = (Maximum Salary) – (Minimum Salary)

= 47 – 37
= 10

So, the range of the starting salaries is 10 or 10,000 dollars.

4. 2 Variance and Standard Deviation

Variance is the average of the squared deviations from the mean.

∑(𝑥−𝜇)2
Population Variance: 𝜎 2 = 𝑁

Standard Deviation is the positive square root of the variance.

∑(𝑥−𝜇)2
Population standard deviation: 𝜎 = √ 𝑁

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Finding the Population Variance and Standard Deviation

Steps
IN WORDS IN SYMBOLS
1. Find the mean of the data set. Σ𝑥
𝜇=
𝑁
2. Find the deviation of each entry. 𝑥 − 𝜇|
3. Square each deviation. (𝑥 − 𝜇)2
4. Add to get the sum of squares. Σ(𝑥 − 𝜇)2
5. Divide by N to get the population variance. Σ(𝑥 − 𝜇)2
𝜎2 =
𝑁
6. Find the square root of the variance to get
Σ(𝑥 − 𝜇)2
the population standard deviation. 𝜎=√
𝑁

Find the population variance and standard deviation of the starting salaries.
Solution:
𝑥 𝑥−𝜇 (𝑥 − 𝜇)2
41 −0.5 0.25
38 −3.5 12.25
39 −2.5 6.25
45 3.5 12.25
47 5.5 30.25
41 −0.5 0.25
44 2.5 6.25
41 −0.5 0.25
37 −4.5 20.25
42 0.5 0.25
Σ𝑥 = 415 Σ(𝑥 − 𝜇)2 = 88.5

88.5 88.5
𝜎2 = = 8.85 and 𝜎 = √ 10 = 2.97
10

So, the population variance is 8.85 and the population standard deviation is 2.97.

Finding the Sample Variance and Standard Deviation

∑(𝑥−𝑥̅ )2 𝑛 ∑ 𝑥 2 −(∑ 𝑥)2

Sample Variance: 𝑠 2 = or 𝑠2 = (raw score method)
𝑛−1 𝑛(𝑛−1)

(the denominator n – 1 in the formula of sample variance is used for estimation purposes)

∑(𝑥−𝑥̅ )2
Sample standard deviation: 𝑠 = √ 𝑛−1

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Steps
IN WORDS IN SYMBOLS
1. Find the mean of the data set. Σ𝑥
𝑥̅ =
𝑛
2. Find the deviation of each entry. 𝑥 − 𝑥̅
3. Square each deviation. (𝑥 − 𝑥̅ )2
4. Add to get the sum of squares. Σ(𝑥 − 𝑥̅ )2
5. Divide by 𝑛 − 1 to get the sample variance. 2
Σ(𝑥 − 𝑥̅ )2
𝑠 =
𝑛−1
6. Find the square root of the variance to get
Σ(𝑥 − 𝑥̅ )2
the sample standard deviation. 𝑠=√
𝑛−1

Example: Find the sample variance and sample standard deviation.

𝑥 𝑥 − 𝑥̅ (𝑥 − 𝑥̅ )2
41 −0.5 0.25
38 −3.5 12.25
39 −2.5 6.25
45 3.5 12.25
47 5.5 30.25
41 −0.5 0.25
44 2.5 6.25
41 −0.5 0.25
37 −4.5 20.25
42 0.5 0.25
Σ𝑥 = 415 Σ(𝑥 − 𝑥̅ )2 = 88.5

88.5 88.5
Solution: 𝑠 2 = 10−1 = 9.83 and 𝑠 = √10−1 = 3.14

𝑛 ∑ 𝑥 2 −(∑ 𝑥)2
Using the raw score method: 𝑠 2 = 𝑛(𝑛−1)

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Notes:
1. The standard deviation is a measure of the typical amount an entry deviates from the
mean.
2. You can use standard deviation to compare variation in data sets that use the same units
of measure and have means that are about the same.
3. Data entries that lie more than two standard deviations from the mean are considered
unusual, while those that lie more than three standard deviations from the mean are very
unusual.
4. To compare variation in different data sets, you can use standard deviation when the data
sets use the same units of measure and have means that are about the same. For data sets
with different units of measure or different means, us the coefficient of variation.

Coefficient of Variation (CV) is a measure of relative dispersion reflecting how large the
variation is relative to the average. It expresses the standard deviation as a percentage of
the mean. That is, the CV is the ratio of the standard deviation to the mean, expressed in
percent.

Note that the coefficient of variation measures the variation of a data set relative to the
mean of the data.
𝑠
𝐶𝑉 = (100%)
𝑥̅

Example: Find the coefficient of variation (CV) of the mean salaries.

Solution:
3.14
𝐶𝑉 = (100%) = 7.57%
41.5

MEASURES OF VARIABILITY
GROUPED DATA

1. R = upper boundary (highest class interval) – lower boundary (lowest class interval)

∑ 𝑓(𝑥−𝜇)2
2. a. Population Variance: 𝜎 2 = 𝑁

∑ 𝑓(𝑥−𝑥̅ )2
b. Sample Variance: 𝑠 2 =
𝑛−1

𝑛 ∑ 𝑓𝑥 2 −(∑ 𝑓𝑥)2
or 𝑠2 = 𝑛(𝑛−1)
∑ 𝑓(𝑥−𝜇)2
3. a. Population standard deviation: 𝜎 = √ 𝑁
∑ 𝑓(𝑥−𝑥̅ )2
b. Sample standard deviation: 𝑠 = √ 𝑛−1

𝑠
4. 𝐶𝑉 = 𝑥̅ (100%)

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Example: Calculate the following measures of variation: R, MAD, s2, s & CV.

Class Interval f
91 – 100 7
81 – 90 9
71 – 80 12
61 – 70 20
51 – 60 18
41 – 50 15
31 – 40 11
21 – 30 8

Solution:

1. R = 100.5 – 20.5 = 80

∑ 𝑓(𝑥−𝑥̅ )2
2. Sample Variance: 𝑠 2 = 𝑛−1

5930
𝑥̅ = = 59.3
100

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37756
𝑠2 = = 381.37
100 − 1

3. Sample standard deviation: 𝑠 = √381.37 = 19.53

𝑠
4. 𝐶𝑉 = 𝑥̅ (100%)

19.53
𝐶𝑉 = (100%) = 32.93%
59.3

Or

𝑛 ∑ 𝑓𝑥 2 − (∑ 𝑓𝑥)2 100(389405) − (5930)2

𝑠2 = = = 381.37
𝑛(𝑛 − 1) 100(100 − 1)

4.3 Sample Variance and Unbiased Statistics

Sample variability can sometimes underestimate the corresponding population variability.

Thus, observe that the formula in the computation of the sample variance was adjusted by
using n – 1 as a denominator to serve this purpose to further produce a result a more accurate
representation of the population variance. By using n – 1 as the divisor, the value of the
sample variance specifically provides an unbiased estimator of the population variance which
does not follow that every sample variance will be equal to the population variance however,
if you will obtain the average of all sample variances, the product will be an accurate estimate
of the population variance which is the idea behind an unbiased statistic.

According to Gravetter and Wallnau (2017),

A sample statistic is unbiased if the average value of the statistic is equal to the population
parameter. (The average value of the statistic is obtained from all the possible samples for a
specific sample size, n.)

A sample statistic is biased if the average value of the statistic either underestimates or
overestimates the corresponding population parameter.

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4.4 Beyond Variance and Standard Deviation

Presenting the Mean and Standard Deviation in a Frequency Distribution Graph

Image from Gravetter and Wallnau (2017)

Transformation of Scale

Transformation is done by adding or multiplying a constant to each score or by multiplying

each score by a constant value. It is easier to determine the effect of the transformation is
to recall that the standard deviation is associated with distance. If you can choose any 3
scores and find out the distances between them, you can also tell what will happen to the
standard deviation.

1. The standard deviation does not change when a constant is added to each score in
the distribution.
2. If each score is multiplied by the same constant the standard deviation will also be
multiplied by the same constant.

Exercise: Prove statements 1 &2 using your own example.

Assessment

Assignment

Reference

Mathematical Excursions Third Edition by R. N. Aufman, J. S. Lockwood, R. D. Nation & D. K. Clegg.

Brooks/Cole Cengage Learning. Belmont, CA USA. 2013

Statistics for the Behavioral Sciences by Frederick J. Gravetter & Larry B.Wallnau (10th Ed.). CENGAGE
Learning. Boston, MA USA. 2017

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