Topic 4.

MEASURES OF VARIBILITY
A measure of variability is a summary statistic that represents the amount of
dispersion in a dataset. The measures of variability define how far away the data
points tend to fall from the center. Statisticians use summary measures to describe the
amount of variability or spread in a set of data. The most common measures of
variability are the range, variance, and standard deviation.

RANGE
Range is represented by R
The range is the difference between the highest value (HV) minus the
lowest value (LV) in the data set.
In symbol. R = HV – LV

Example:
The retail prices of rice per kilo of the five stores are listed below.
P 42, P38, P40, P45, P35
Find the range.

Solution:
From the list of prices, the highest value, HV = 45
and the lowest value, LV = 35.
R= HV – LV
R = 45 – 35
R = 10

VARIANCE

In a population, variance is the average squared deviation from the

population mean, as defined by the following formula:

σ2 =
N

where σ2 is the population variance, μ is the population mean, Xi is the ith element from
the population, and N is the number of elements in the population.
 Observations from a simple random sample can be used to estimate the variance
of a population. For this purpose, sample variance is defined by slightly different formula,
and uses a slightly different notation:

S2 =
N−1

Where S2 is the variance of the sample

Xi is the ith element from the sample
is the mean of the sample
N is the number of elements in the sample.

STANDARD DEVIATION (SD)

Standard Deviation (SD) is the square root of the variance.

Example:
The numbers of calls per day received by the secretary of an
office were recorded. as follows.
15, 8, 12, 25, 6, 18
Find the variance and standard deviation.
Solution:
The steps involved in solving the are shown in the table.

Step 1. Step 2. Step 3 Step 4

Rewrite the scores Find the mean, that is solving Find Square each of the
in vertical ( - ) results in step 3,
arrangement then take the sum,
that is ( - )2
15 15 + 8 + 12 + 25 + 6 + 18 15-14=1 (1)2 = 1
r=
6
8 = 14 8-14= -6 (-6)2 = 36
12 12-14 =2 (2)2 = 4
25 25-14 = 11 (11)2 = 121
6 6-14 = -8 (-8)2 = 64
18 18-14 = 4 (4)2 =16
⅀( - )2= 242
 Step 5. Solving for the variance, use the formula

S2 =
N−1

242
S2 =
6−1

S2 = 48.4

Step 6. Solving for the standard deviation (SD)

SD = square root of the variance

SD = 48.4 = 6.96

COEFFICIENT OF VARIATION (CV)

To make the mean and standard deviation more meaningful, we are going
to use them for the computation of the coefficient of variation. The coefficient of
variation (CV) is a measure of relative variability. It is the ratio of the standard
deviation to the mean (average). The formula is

standard deviation
CV = 100%
mean
The coefficient of variation (CV) is particularly important to measure the
degree of homogeneity of data. CV is used to analyze series of values and is a
measurement of precision. The smaller the variation between a data set the
greater the precision. Basically CV <10 is very good , 10% - 20% is good

CV less than or equal to (≤ ) 20%, the data set is considered

homogeneous.
 Consider the previous example.
The numbers of calls per day received by the secretary of an office were
recorded. as follows.
15, 8, 12, 25, 6, 18
Find the coefficient of variation and describe the homogeneity of the data.
Solution:
= 14
SD = 6.96

6.96
CV =
14
100%

CV = 49.71%
Since CV = 49.71% greater than 20%, the data is considered
heterogeneous. It means that scores in a data set are widely scattered or
spread.

Example:
The retail prices of rice per kilo of the five stores are listed below.
P 42, P38, P40, P45, P35
The mean, = 40 and SD=3.81.
Find the coefficient of variation and discuss the homogeneity of
the data.

Solution:

3.81
CV =
40
100%
CV = 9.53%
Since CV = 9.53% less than 20%, the data is considered homogeneous. It
means that scores in a data set are closer to the mean.
 Computation of variance and standard deviation using e cel.

Step 1. Open the e cel and encode the scores or numerical observations.

Step 2. Click Formulas

Step 3. Click More Functions, and click statistical
 Step 4. Click STDEV, then e cel displays( function arguments) a dialogue
bo

Step 5. Highlight the scores and click OK

SD = 3.81

From step 3, variance may be computed by scrolling and clicking VAR.

Then highlight the scores and click OK.

Variance = 14.5