Chapter 3

Measures of variation or dispersion: These measures help us to compare each value in the
data from the measure of central tendency to understand their variation. We can compare two
data to find out which one is more consistent than the other one. A lower measure of
variation shows a higher consistency for the data and a higher value shows more variability.
They also act as measures of risk, since risk is a type of variation. Some of the important
measures of variation are:

(i) Range: This is the difference between the highest value and the lowest value in the data.
Though it is very easy to find, it gives very little information as we just compare only the
lowest value and the highest value.

(ii) Mean Deviation: Here we compare each value of the data with reference to the mean or
median or mode. Most commonly, we compare the values with the mean. A lower value of
mean deviation shows a lesser variation from the mean and more consistency in the values.

Consider an example.

X X – X bar mod (X – X bar)

5 1 1

4 0 0

3 -1 1

6 2 2

2 -2 2