Measures of

Variability
(Measures of
Dispersion)

Recall
Measures of Central Tendency
numerical descriptive measures which
indicate/locate the center of the
distribution of a set of data
Mean
Median
Mode

Measures of Variability

These are measures of the average distance

of each observation from the center of the
distribution.

They measure the homogeneity or

heterogeneity of a particular group.

Consider the test scores of the two

groups. Which of the two is a better
group, the male or the female?
Ann 84

Kyl 100

Pat
86

Jeg -

65

Iya
85

Max -

75

Jun -

85

Jen
Ave.- - 84
82
Liz
83

Yel - 95
Ave. 84

Take a look at how far apart their

grades are from one another!

60

60

70

70

80

80

90

90

100

100

Measures of
Variability
Range

Standard
Deviation

Variance

Coefficient of
Variation

Measures of
Variability

A small measure of
variability would
indicate that the set
of data are

A big measure of
variability would
indicate that the set
of data are

Clustered closely
around the mean
more homogeneous

far away from the

mean
heterogeneous

less variable

more variable

more consistent

less consistent

more uniformly
distributed

less uniformly
distributed

Measures of
Variability
Range (R)
The difference between
the highest value and
the lowest value in the
set of data.
R = Hv - Lv
Example: Find the
range of the grades in
Math of the two groups
in our example.

Range
Standard
Deviation
Variance
Coefficient
of Variation

Consider the test scores of the two

groups. Which of the two is a better
group, the male or the female?
Ann 84

Kyl 100

Pat
86

Jeg -

65

Iya
85

Max -

75

Jun -

85

Jen
Ave.- - 84
82

RangeLiz
= 86
- - 82 = 4
83

Yel - 95
Ave. 84

Range = 100 - 65 = 35

Measures of
Variability
Disadvantages:
1. For very large sample, it is
an unstable descriptive
measure of variability.
2. Since only two values are
used in the computation, the
range is an unreliable
measure of variability.
3. The range of two sets of
data composed of different
numbers of samples are not
directly comparable.

Range
Standard
Deviation
Variance
Coefficient
of Variation

Consider two small businesses with four

employees each. In one business, two
employees make $19 an hour and the
other two make $21. In the second
business, two employees make $15 an
hour, one makes $24, and the last makes
$26:

Example

Let's assume that you invest in Company

XYZstock, which has returned an average
10% per year for the last 10 years. How risky
is this stock compared to, say, Company ABC
stock? To answer this, let's first take a closer
look at the year-by-year returns that compose
that average:

XYZ Company

ABC Company

Measures of
Variability
Standard Deviation
It shows the average
distance of the
observations from the
mean.
It shows how much
variation exists from the
average.

Range
Standar
d
Deviatio
n
Variance

population standard deviation

sample standard deviation s

Coefficient
of Variation

Measures of
Variability
Standard Deviation
Population standard
deviation ()

2
(
x

x
)

Sample standard deviation

(s)
s

(x x)2
n 1

Range
Standar
d
Deviatio
n
Variance
Coefficient
of Variation

Consider the test scores of the two

groups. Which of the two is a better
group, the male or the female?
Ann 84

Kyl 100

Pat
86

Jeg -

65

Iya
85

Max -

75

Jun -

85

Jen
Ave.- - 84
82

s = 1.58
Liz
83

Yel - 95
Ave. 84

s = 14.32

Measures of
Variability
Range

Variance
The average of the
squared deviation from
the mean.

sample variance s

population variance 2

Standard
Deviation
Variance

Coefficient
of Variation

Measures of
Variability
Variance

Range

population variance 2 :

x - x

sample variance s2 :
2

s =

x - x
n1

Standar
d
Deviatio
n
Variance

Coefficient
of Variation

Consider the test scores of the two

groups. Which of the two is a better
group, the male or the female?
Ann 84

Kyl 100

Pat
86

Jeg -

65

Iya
85

Max -

75

Jun -

85

Jen
Ave.- - 84
82
2
s
Liz= -2.5

83

Yel - 95
Ave. 84

s2 = 205.0

Computational Formula for Variance

Variance for Grouped Data

where f = frequency of the ith class

X = classmark of the ith class

= mean of the frequency distribution
n = total number of observations
k = number of classes

MEAN ABSOLUTE DEVIATION

The mean deviation (also called the

mean absolute deviation) is the mean of
the absolute deviations of a set of data
about the data's mean. For a sample size
N, the mean deviation is defined by

Exercise
Find the range, variance, standard
deviation and mean absolute
deviation.
1.) The following scores were given by
6 judges for a gymnasts performance
in the vault: 7, 5, 9, 7, 8, and 6.
2.) A sample of 5 households showed
the following number of household
members: 3, 8, 5, 4 and 4.

Measures of
Variability
Coefficient of
Variation
It is the ratio of the
standard deviation to
the mean.
CV =

100%

Range
Standar
d
Deviatio
n
Variance
Coefficient
of Variation

Coefficient of Variation
It is used when:
a. The means of the distributions
being compared are far apart, or
b. The data are in different units.
It is usually expressed in percent.
CV is also called measure of relative
dispersion.

Coefficient of Variation
Example: The mean income of a sample of
homeowners in Barangay A is P40,000 and the
standard deviation is P4,000. In Barangay B, the
mean income of a sample of homeowners is
P12,000 and the standard deviation is P1,200.
Compare the relative dispersion in the two
groups of incomes.

Solution:Barangay
s
4000A
CV (100)
(100) 10%
X

40000

Barangay
1200 B
CV
(100) 10%
12000

Interpretation: The incomes in both barangays

are spread out 10% from their respective means.

Coefficient of Variation
Problem: We will now compare the dispersion in
the ages of the homeowners in Barangay A with
the dispersion in their incomes. The mean age of
the sample of homeowners is 40 years with a
standard deviation of 10 years. Recall that for
their incomes, the mean is P40,000 and the
standard deviation is 4000.
Solution:
Income
Age
4000
CV
(100) 10%
40000

10
CV
(100) 25%
40

Interpretation:
There is greater relative
dispersion in the ages of the homeowners in
Barangay A than in their incomes.

Coefficient of Variation
Example: The table shows a players record
of assists and points in the 10 randomlyselected games which he played. Determine
in which area did he perform more
consistently.
ga
me

2
5

2
2 1 23. 5.6
30 22 23 22 16 35
5
0 8 6
0

1
0

2.9
9 4 5.9
6

1
9
0

Coefficient of Variation
1. An investor is considering the purchase of one
of two stocks. The yield of Venture Electronics
has averaged P105 per share over the past 10
years with a standard deviation of P15 per share.
Aerospace Ltd. has yielded an average of P330
per share during the same period with a
standard deviation of P40. Compare the relative
2. dispersion
A recentofstudy
of stocks.
ARAL College of Business
the two
faculty revealed that the arithmetic mean salary
for nine months is P21000 and the standard
deviation of the sample is P3000. The study also
showed that the faculty had been employed an
average of 15 years with a standard deviation of
4 years. How does the relative dispersion in the
distribution of salaries compare with that of the

Coefficient of Variation
3.

Radio commercials on the local rock station

DWKC average 35 seconds with a standard
deviation of 8 seconds. DWIZ, the local easylistening station, has a mean commercial length
of 30 seconds with a standard deviation of 5
seconds. Compare the relative dispersion of the
4. two Agroups.
large insurance company offers both
homeowner and auto coverage. A study of last
years claims showed the mean claim for
homeowner claims was P1260 with a standard
deviation of P425. The mean claim for an auto
policy was P875 with a standard deviation of
P300. Compare the relative distributions of the
two types of claims.

Shapes of Distribution

Normal Distribution

Thenormal distributionis an extremely

important tool in statistics. The shape of a
normal distribution is a bell-shaped curve,

Empirical Rule

Measures of Shapes:
Skewness and Kurtosis

skewness tells you the amount and

direction of skew(departure from horizontal
symmetry),

kurtosis tells you how tall and sharp the

central peak is, relative to a standard bell
curve.

Skewness

Karl Pearsons Coefficient of Skewness

Or

How can you interpret the skewness

number?Bulmer (1979)

rule of thumb:
If skewness is less than 1 or greater than
+1, the distribution ishighly skewed.
If skewness is between 1 and or
between + and +1, the distribution is
moderately skewed.
If skewness is between and +, the
distribution isapproximately symmetric.

Kurtosis

Higher kurtosis means more of the variance is

the result of infrequent extreme deviations, as
opposed to frequent modestly sized deviations
A normal distribution has kurtosis exactly 3
(excess kurtosis exactly 0). Any distribution
with kurtosis 3 (excess 0) is
calledmesokurtic.

A distribution with kurtosis <3 (excess kurtosis

<0) is calledplatykurtic. Compared to a
normal distribution, its tails are shorter and
thinner, andoftenits central peak is lower and
broader.
A distribution with kurtosis >3 (excess kurtosis
>0) is calledleptokurtic. Compared to a
normal distribution, its tails are longer and
fatter, andoftenits central peak is higher and
sharper.