CORPORATE INSTITUTE OF MANAGEMENT, BHOPAL

Subject Name: (QUANTITATIVE METHODS) Subject code: CP-102

Lecture Notes By - Prof. Akhilesh jain
Course : MBA , Semester: I

Unit – II : Dispersion Measures of dispersion range, Q.D., M.D., S.D., coefficient of

variation, skew ness, kurtosis.

MEASURES OF DISPERSION
Statistics is a decision making tool used in the face of uncertainty. Perhaps no concept is more
important in statistics than the measurement and understanding of variability. Measures of dispersion
(also called measures of spread, measures of variability) are attempts to describe the spread or
fluctuation is a data set.
Definitions:

“Dispersion is the measure of variation of the variables about a central value”.

“Dispersion is a measure of the extent to which the individual items vary”.

Requisites of a good average (or) characteristics for ideal measures of dispersion:

i) It should be rigidly defined.

ii) It should be easy to under stand and simple to calculate.
iii) It should be based on all the observations of the series.
iv) It should be used for further algebraic treatments.
v) It should not be affected much by the sampling fluctuations.
vi) It should not be affected by the extreme items in the series.
Objectives or uses of dispersion:

i) Measures of dispersion tell us whether an average is a true representative of the series

or not.
ii) The extent of variability between two or more series can be compared with the help of
the measures of dispersion.
iii) It is used to determine the degree of uniformity, reliability and consistency amongst
two or more sets of data.
iv) Measures of dispersion are used in the statistical measures like correlation, regression
etc. for further analysis.
Absolute and relative measures of dispersion:

The dispersion of a series may be measured either absolutely or relatively. If the dispersion is
expressed in terms of the original units of the series, it is called absolute measure. of dispersion. The
disadvantage of absolute measure of dispersion is that it is not suitable for comparative study of the
characteristics of two or more series.

For example the income of workers may be in rupees, while their heights may be in inches. Thus a
comparison to measure their variations can not be made as both are in different units.

So for comparison point of view it is necessary to calculate the relative measures of

dispersion which are expressed as percentage form (i.e. unit less number). These types of expressions
are called coefficients of dispersion or coefficient of variation.
 CORPORATE INSTITUTE OF MANAGEMENT, BHOPAL
LECTURE NOTES: BY DR. AKHILESH JAIN

Types of measures of dispersion:

The following are the important measures of dispersion.

1) Range
2) Quartile deviation or Semi inter quartile range.
3) Mean absolute deviation or Mean deviation
4) Standard deviation
5) Lorenz curve
First two measures are called „method of limits‟, 3rd and 4th are called „method of moments‟
and 5th one is „graphic method‟.

Range - Difference between highest and lowest value; gives us some idea of how much variation
there is in the categories of a variable (some variables have more response categories than others)

Generally,

The higher the range: the more variation in the categories of response;

The smaller the range: the less variation in the categories of response

In notation, the range is R = H – L.( Difference between highest and lowest value)
Quartiles – Quartiles divides data into four groups: Q1 = the bottom 25% of scores; Q2 = median or
50% of scores, and Q3 = 75% of all scores. Also, 50% of scores fall between Q1 and Q3

IQR – Inter quartile range = Q3 – Q1

Measure of dispersion that tells us about the distribution of responses to a variable in relation
to the median; can be used with ordinal or numerical variables, and tells us the range of values that
encompass the middle 50% of the respondents to a variable

Box plots – also known as box-and-whiskers, is a graphical representation of the five-number

summary. Plot the quartiles on a graph, and make a box around Q1 and Q3, with a line for the median
(Q2) in the middle. Then, plot the lowest and highest points, and connect these with ‘whiskers’.

3 ways a boxplot can indicate skewness:

1. The middle line, or 50th percentile, can be unevenly spaced within the box
2. The box can be unevenly spaced between the whiskers
3. There are asymmetric outliers, i.e. points that lie beyond the whiskers on one side of the
distribution

Lecture Notes : By Prof. Akhilesh Jain , Department of Mathematics, CIM , Bhopal : 9630451272(2)