Objectives

Determine the meaning of measures of dispersion

Calculate various measures of dispersion
▪ Dispersion measures the extent to which a random variable is spread about the mean.
▪ Four main measures of spread are
▪ Range,
▪ Inter-quartile range,
▪ Semi-inter-quartile range
▪ Standard deviation.
 Lower Upper
Quartile Midpoint Quartile
Min Q1 Q3 Max

0% 25% 75% 100%

50%

Max - Min IQR = 75% value - 25% Value

▪ Range - is the difference between the largest and the smallest
observation.
▪ The Interquartile range (IQR) of a set of data is defined as the
difference between its upper(Q3) and lower(Q1) quartiles.
▪ I.Q.R = Q3 – Q1.
▪ A quartile is one of three values that divide an ordered set of data into four
equal parts.
▪ Lower Quarter (Q1) = median of the lower half of the data
▪ Upper Quarter (Q3) = median of the upper half of the data

▪ Semi-Interquartile Range = IQR/2

 ▪ Find the range, interquartile range, and sem-interquartile range of the following sets of
numbers.

a) 3, 5, 4, 1, 5, 11, 6, 7 b) 21, 19, 33, 15, 25, 20, 28

1, 3, 4, 5, 5, 6, 7, 11 15, 19, 20, 21, 25, 28, 33
6+7
Q1 = 3 + 4 = 3.5 Q3= = 6.5 Q1 = 19 Q3 = 28
2 2

∴ Interquartile range (IQR) = 6.5 - 3.5 = 3 IQR = 28 - 19 = 9

▪ Determine the interquartile range of the following sets of data

A. 3, 11, 5, 4, 17, 22, 15 B. 25, 33, 18, 17, 21, 30

3, 4, 5, 11, 15, 17, 22 17, 18, 21, 25, 30, 33

IQR = 30 - 18 = 7
IQR = 17 - 4 = 13
▪Standard Deviation is the measure of dispersion
(spread) of a set of data from its mean.
▪A low standard deviation indicates that the data
points tend to be very close to the mean; A
high standard deviation indicates that the data
points are spread out over a large range of
values.
▪ Assume the following shows the percent of asking price received
on the previous nine sales for each company:
▪ NHT: 88, 92, 91, 89, 89, 91, 91, 89, and 90
▪ WIHD: 71, 100, 100, 83, 100, 95, 86, and 90
▪ How can you make an informed decision about which company will
offer you the greatest benefit for the least risk? You must analyze
each set of the dispersion, which is the amount of variation within
a data set. Only when you do that, will you be able to truly
compare these two companies.