STATISTICS-I

Chap-04: Measures of Dispersion

Contents:
 Definition
 Absolute measures
 Relative measures
 Comparison
 Mathematical problems
 Uses or importance
 Measures of Dispersion
Definition:
The average distance/variation of different values from their
central value is called dispersion and the formulas used to calculate
this distance is called measures of dispersion. It tells us how the
individual values are scattered around the central value. It can
never be negative since it indicates distance. The minimum value
of its is ‘0’ when all values are equal.
For an example, let there are five values as 1, 2, 3, 4, 5 where ‘3’ is
the central value and the other values are scattered around ‘3’ as
1 5
following:
4 3 2
 Measures of Dispersion
Measures:
There are two types of measure of dispersion
1) Absolute measures of variation
2) Relative measures of variation

1) Absolute measures:
The four important absolute measures of dispersion are:
a) Range
b) Quartile deviation
c) Average/Mean deviation
d) Variance and standard deviation

Absolute measures are expressed in the same unit in which the original variables are
measured.
 Measures of Dispersion
2) Relative measures:
The important relative measures of dispersion are:
a) Co-efficient of range
b) Co-efficient of quartile deviation
c) Co-efficient of mean deviation
d) Co-efficient of variation or CV

It is the ratio of a measure of absolute variation to an average. Relative

measures are pure number and independent of the unit of
measurement and expressed in percentage. Sometimes it is difficult to
compare different sets of data when data is in different units. In such a
situation, relative measures are fruitful.
 Measures of Dispersion
a) Range & coefficient of range:
The difference between highest value and lowest value in a set of observations
is range i.e., range = maximum – minimum
It is denoted by ‘R’ and defined as,

R = = Highest, = Lowest

Now, the coefficient of range is defined by

C.R. =

Example: In 1, 2, 3, 4, 5 the range is (5-1) = 4.

Uses: In quality control, weather forecasting, stock exchange.
 Measures of Dispersion
b) Quartile deviation & coefficient of quartile deviation:
It is another type of range obtained from the quartiles. It is also known
as semi-inter quartile range. It is denoted by Q.D. and defined as

Q.D. =

Now, the coefficient of Q.D. is defined as

C.Q.D. =

Uses: to measure variation in case of open-ended distribution.

 Measures of Dispersion
C) Mean deviation & coefficient of mean deviation:
Mean deviation is the average of absolute deviations of all
observations from their central value like arithmetic mean ,
median or mode. Mean deviation from median is the least. It is
denoted by M.D. and defined as

For ungrouped data:

1) Mean deviation about mean, M.D.
2) Mean deviation about median, M.D.(Me)
3) Mean deviation about mode, M.D.
 Measures of Dispersion
For grouped data:
1) Mean deviation about mean, M.D.
2) Mean deviation about median, M.D.(Me)
3) Mean deviation about mode, M.D.
Coefficient of mean deviation:
1) Coefficient of mean deviation about mean, C.M.D
2) Coefficient of mean deviation about median, C.M.D
3) Coefficient of mean deviation about mode, C.M.D
 Measures of Dispersion
d) Variance or standard deviation & coefficient of variation:
The average of squared deviations of the observations is known as
variance when the deviations are taken from arithmetic mean and
the positive square root of variance is known as standard
deviation. If the variable is the variance and standard deviation are
defined as
Variance, V (ungrouped data)
or, (grouped data)

And Standard deviation, SD

 Measures of Dispersion
Coefficient of variation:
It is denoted by CV and defined as, CV

Importance or uses of CV:

It is independent of unit of measurement and thus is suitable for
comparing the variability or measuring consistency of two or more sets
of data.
1) If the mean of several series are equal then the series having minimum
SD will be better than others or more consistent.
2) If the SD of several series are equal then the series having maximum
mean will be better than others.
3) If the mean & SD of several series are not equal then the series having
minimum CV will be better than others.
 Measures of Dispersion
Properties of standard deviation/variance:
1) Mean deviation can’t be greater than SD i.e., M.D. SD.
2) For two unequal observations MD = SD = R/2.
3) For ‘n’ positive observations,
4) For first ‘n’ natural numbers,
5) Combined SD for two series,
Where,
 Measures of Dispersion
6) It is independent of change of origin but not of scale.

Let, is original variable and is new variable which is defined as

; where, a = origin and c =scale
 Measures of Dispersion
Example:
: 7, 12, 17, …, 52 with SD(x) = 14.36

Let, ; where, scale c = common difference= 5 and origin a = 1st value –

common difference.

: 1, 2, 3, …, 10 (n=10)
Now, SD(d), = 2.87228
Therefore, SD(x) = C. SD(d) = 52.87228 = 14.36
Hence, we can say standard deviation is independent of origin but
not of scale.
 Measures of Dispersion
Mathematical Problem:
1) The weekly income and the number of workers are given below:
Weekly Income ($) No. of Workers
50 – 100 20
100 – 150 40
150 – 200 45
200 – 250 30
250 – 300 15

a) Calculate and compare mean deviation about mean and median

b) Calculate and comment on variance and CV of weekly income
 Measures of Dispersion
Solution:
Weekly No. of Cumulative Mid
Income Workers frequency Value
($)
50 – 100 20 20 75 1500 112500 1866.6 1833.4
100 – 150 40 60 125 5000 625000 1733.2 1666.8
150 – 200 45 105 175 7875 1378125 300.15 374.85
200 – 250 30 135 225 6750 1518750 1700.1 1749.9
250 – 300 15 150 275 4125 1134375 1600.05 1624.95
=n= =
Total 150 = 25250 4768750 = 7200.1 = 5749.9

We know, mean = 168.33 $ (appr)

 Measures of Dispersion
Here, n/2 = 150/2 = 75
since, 75th value lies in (150 – 200) class therefore it will be the
median class where
L = Lower limit of the median class = 150
n = Total no. of observations = 150
= Cumulative frequency of the pre-median class = 60
= Frequency of the median class = 45
C = Class interval of the median class = 50
We have, Me = L + = 150 + = 166.67 $ (appr)
 Measures of Dispersion
a) Mean deviation about mean, M.D.

= 48 (appr)

Mean deviation about median, M.D.(Me)

= 38.33 (appr)
Comparison: MD(median) < MD(mean)
b) We know, variance,

= 3456.68 (appr)

and Standard deviation, = 58.79 $ (appr)

Coefficient of variation, CV =

= 34.93
Comment: The workers weekly incomes are in average 58.79 $ standard distance from their
average weekly income and there is 34.93% variation among the weekly incomes of the workers.
 Measures of Dispersion
2) The arithmetic mean and variance of two numbers are 16 and 9 respectively. Find
the numbers and coefficient of variation.
Solution:
Let, the two numbers are and respectively such that > .
Given, mean = 16 and variance = 9. So standard deviation, = 3.

We have, mean, = 16

or, = 32 ……… (i)

Again, for two unequal observations,

or, 3 =
 Measures of Dispersion
By adding (i) and (ii), we get = 38
or, = 19

Putting the value of in (i) we get, = 13

Now, CV =
=
= 18.75
So, the two numbers are 19 and 13 with 18.75% variation between them.
 Measures of Dispersion
3) A & B are two factories. The average weekly wages and SD of
wages of the workers are given below:
Factory Average Weekly wages (TK) SD of wages Number of workers

A 1560 90 200

B 1580 70 160

a) Calculate combined mean and combined standard deviation

b) Which factories wage distribution is more uniform?
 Measures of Dispersion
Solution:
Let, no. of workers of factory A is
no. of workers of factory B is
mean wage of factory A is
mean wage of factory B is
SD of wage of factory A is
SD of wage of factory B is

a) Here, = 200, = 160, = 1560, = 1580, = 90 and = 70

 Measures of Dispersion

Combined mean wage,

=
= 1568.89 (TK)

Now, Combined SD for two series,

Where, = 1560 – 1568.89 = - 8.89
= 1580 – 1568.89 = 11.11
 Measures of Dispersion

= 82.32

b) Coefficient of variation for factory A and B is defined as

CV(A) = CV(B) =

= =

= 5.77 (appr) = 4.43 (appr)

Compare: Since CV(B)<CV(A) therefore wage distribution of factory B is more uniform.

 Measures of Dispersion
Variance is always greater than standard deviation-comment
If variance is 1 standard deviation is also 1
If variance is greater than 1 i.e., 4 then SD =2
If variance is less than 1 i.e., 0.04 then SD = 0.2
So we can say that variance is not always greater than SD.
 Measure of Dispersion
Characteristics of an ideal measure of dispersion:
 It should be well defined
 It should be easily understandable and easy to calculate
 It should be based on all the observations
 It should be suitable for further arithmetic algebraic treatment
 It should be less affected by extreme values

Since SD and CV follows maximum characteristics of an ideal

measure and is widely used for its simplicity hence the SD and CV is
the best absolute and relative measure of dispersion, respectively.
Between SD and CV, CV is the best measure of dispersion.
 Measures of Dispersion

Uses/Importance/Objectives/purposes of dispersion: Measure of

dispersion is needed for four basic purposes:

I. To determine the reliability of an average.

II. To serve as a basic for the control of the variability.
III. To compare two or more series with respect to their variability.
IV. To facilitate the use of other statistical measures.