Handout #7

POLI 300

N. R. Miller

MEASURES OF DISPERSION (VARIABILITY)

if all cases have identical observed values (and thereby also all have the average
value), dispersion is zero;

(b)

if most cases have observed values that are quite close together (thereby also quite
close to the average value), dispersion is low (but greater than zero); but

(c)

if many cases have observed values that are quite far apart from many others (or
from the average value), dispersion is high.

A measure of dispersion provides a summary statistic that indicates the magnitude of such dispersion
and, like a measure of central tendency, is a univariate statistic.
Because dispersion is concerned with how close together or far apart observed values
are (i.e., with the magnitude of the intervals between them), it should be apparent that the notion of
dispersion make sense and measures of dispersion are defined only for interval (or ratio)
variables. (There is one exception: a very crude measure of dispersion called the variation ratio,
which is defined for ordinal and even nominal variables. It will be discussed briefly in the Answers
& Discussion to PS #7.)
There are two principal types of measures of dispersion: range measures and deviation
measures.
Range Measures
Range measures are based on the distance between (relatively) extreme values observed
in the data and are conceptually connected with the median as a measure of central tendency (See
the data illustrating Percentiles, the Median, and Ranges on the back page of the Handout #6 on
Measures of Central Tendency.)
The (total or simple) range is the maximum (highest) value observed in the data (the
value of the case at the 100th percentile) minus the minimum (lowest) value observed in the data (the
value of the case at the 0th percentile) that is, the distance or interval between the values of
these two extreme cases. (Note that this may be less than the range of the possible values of the
variable, since logically possible extreme values may not be observed in actual data; for example,
the variable LEVEL OF TURNOUT has logically possible values ranging from 0% to 100%, but in
U.S. Presidential elections, the range of observed values [as conventionally measured, i.e., as Total
Vote for President divided by Voting Age Population] over the past 60 years or so ranges from a
minimum observed of about 48% (in 1996) to about 64% (in 1960). The problem with the (total or
simple) range as a measure of dispersion is that it depends on the values of just two cases cases
that by definition have atypical (and perhaps extraordinarily atypical) values. In particular, the range

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makes no distinction between a polarized distribution in which almost all observed values are close
to either the minimum or maximum values and a distribution in which almost all observed values
are bunched together but there are a few extreme outliers. Also the range is undefined for theoretical
distributions that are open-ended (the technical term is asymptotic), like the normal distribution
(that we will take up in the next topic) or the upper end of an income distribution type of curve (see
PS #5C). Therefore other variants of the range measure that do not reach entirely out to the extremes
of the frequency distribution are often used in place of the total range.
The interdecile range is the value of the case that stands at the 90th percentile of the
distribution minus the value of the case that stands at the 10th percentile that is, the distance
or interval between the values of these two less extreme cases. In like manner, the interquartile
range is the value of the case that stands at the 75th percentile of the distribution minus the value
of the case that stands at the 25th percentile. (The first quartile is the median observation among
all cases that lie below the overall median and the third quartile is the median observation among
all cases that lie above the overall median. In these terms, the interquartile range is third quartile
minus the first quartile.)
We have previously used a range measure in a special context. The handout on Random
Sampling said the following:
Suppose the Gallup Poll takes a random sample of n respondents and reports that
the President's current approval rating is 62% and that this sample statistic has a margin of
error of 3 %. Here is what this means: if (hypothetically) Gallup were to take a great many
random samples of the same size n from the same population (e.g., the American VAP on
a given day), the different samples would give different statistics (approval ratings), but 95%
of these samples would give approval ratings within 3 percentage points of the true
population parameter.

Thus, if our data is the list of sample statistics produced by the (hypothetical) great many
random samples, the margin or error specifies the range between the value of the sample statistic that
stands at the 97.5th percentile minus the sample statistic that stands at the 2.5th percentile (so that
95% of the sample statistics lie within the range). Specifically (and letting P be the value of the
population parameter) this range is (P + 3%) !(P ! 3%) = 6%, i.e., twice the margin error.
Deviation Measures
Deviation measures are based on average deviations from some average value. (Recall the
discussion of Deviations from the Average in Handout #6 on Measures of Central Tendency.) Since
we are dealing with interval variables, we can calculate means, and deviation measures are typically
based on the mean deviation from the mean value. Thus the usual deviation measures are conceptually connected with the mean as a measure of central tendency.
Suppose we have a variable X and a set of cases numbered 1,2, . . . , n. Let the observed
value of the variable in each case be designated x1, x2, etc. Thus:
mean of X = Gx =

x1 + x2 +...+ xn
3x
____________
= ___ .
n
n

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The deviation from the mean for a representative case i is (xi ! Gx ). If almost all of these
deviations are small (if almost all cases are close to the mean value), dispersion is small; but if many
of these deviations are large (if many cases are much above or below the mean), dispersion is large.
This suggests we could construct a measure D of dispersion that would simply be the average (mean)
of all the deviations:
D =

3 (xi ! Gx )
(x1 ! Gx ) + (x2 ! Gx ) + ... + (xn ! Gx )
___________________________ = ________
.
n
n

But this will not work, because some of the deviation are positive and others are negative
and, as we saw earlier (Handout #6, point (d) under Deviations from the Average), these positive and
negative deviations necessarily balance out and add up to zero, i.e., for any distribution of
observed values 3(xi ! Gx ) = 0.
A practical way around this problem is simply to ignore the fact that some deviations are
negative while others are positive by averaging the absolute values of the deviations (in effect, by
ignoring the negative sign before each negative deviation):

3 *xi ! Gx *
________ .
n
This measure (called the mean deviation) tells us the average (mean) amount that the values
for all cases deviate (regardless of whether they are higher or lower) from the average (mean) value.
Indeed, this is an intuitive, understandable, and perfectly reasonable measure of dispersion, and it
is occasionally used in research.
MD =

However, statisticians are mathematicians, and they dislike this measure because the formula
is mathematically messy by virtue of being non-algebraic (in that it ignores negative signs).
Therefore statisticians, and most researchers, use another slightly different deviation measure of
dispersion that is algebraic, and that makes use of the fact that the square of any (positive or
negative) number (i.e., the number multiplied by itself) other than zero is itself always positive. This
formula is based on finding the average of the squared deviations; since these are all non-negative,
they do not balance out. This measure of dispersion is called the variance of the variable.

3 (xi ! Gx )2
Variance of X = Var(X) = s 2 = _________
.
n
That is, the variance is the average squared deviation from the mean. Remember from
Handout #6 (point (e) under Deviations from the Average) that the average squared deviation from
the mean value of X is smaller than the average squared deviation from any other value of X. The
variance is the usual measure of dispersion in statistical theory, but it has a drawback when
researchers want to describe the dispersion in data in a practical way. Whatever units the original
data (and its average values and its mean dispersion) are expressed in, the variance is expressed in
the square of those units, and thus it doesn't make much intuitive or practical sense. This can be
remedied by finding the (positive) square root of the variance (which takes us back to the original
units). This measure of dispersion is called standard deviation of the variable:

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__________
/ 3 (xi ! Gx )2
Standard Deviation of X = SD(X) = s = / _________ .
r
n
In order to interpret a standard deviation, or to make a plausible estimate of the SD of some
data, it is useful to think of the mean deviation because (i) it is easier to estimate the magnitude of
the mean deviation and (ii) the standard deviation has approximately the same numerical magnitude
as the mean deviation. More precisely, given any distribution of data, the standard deviation is never
less than the mean deviation; it is equal to the mean deviation if the data is distributed in a
maximally polarized fashion; otherwise the SD is somewhat larger typically about 20-50%
larger.
Sample Estimates of Population Dispersion
Random sample statistics that are percentages or averages provide unbiased estimates of the
corresponding population parameters. However, sample statistics that are dispersion measures
provide estimates of population dispersion that are biased (at least slightly) downward. This is most
obvious in the case of the range; it should be evident that a sample range is almost always smaller,
and can never be larger, than the corresponding population range. The sample standard deviation
(or variance) is also biased slightly downward . (While the SD of a particular sample can be larger
than the population SD, sample SDs are on average slightly smaller than the corresponding population SDs). However, the sample SD can be adjusted to provide an unbiased estimate of the
population SD; this adjustment consists of dividing the sum of the squared deviations by n !1, rather
than by n. (Clearly this adjustment makes no practical difference unless the sample is quite small.
Notice that if you apply the SD formula in the event that you have just a single observation in your
sample, i.e., n = 1, it must give SD = 0 regardless of what the observed value is. More intuitively,
you can get no sense of how much dispersion there is in a population with respect to some variable
until you observe at least two cases and can see how far apart they are.) This is why you will often
see the formula for the variance and SD with an n !1 divisor (and scientific calculators often build
in this formula). However, for POLI 300 problem sets and tests, you should use the formula given
in the previous section of this handout.
Dispersion in Ratio Variables
Given a ratio variable (e.g. income), the interesting dispersion question may pertain not to
the interval between two observed values or between an observed value and the mean value but to
the ratio between the two values. (For example, one household poverty level is defined as one
half the median household income, and households with more than twice the median income are
sometimes characterized as well off. The average compensation of CEOs today is about 250 times
that of the average worker, whereas 50 years it was only about 40 times that of the average worker.)
The degree of dispersion in ratio variables can naturally be referred to as the degree inequality. One
ratio measure of dispersion/inequality is the coefficient of variation, which is simply the standard
deviation divided by the mean. Another is the Gini Index of Inequality, which is based on a
comparison between the actual cumulative distribution when cases are ranked ordered from lowest

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to highest value (e.g., from poorest to richest) and the cumulative distribution that would exist if all
cases had the same value.
How to Compute a Standard Deviation
The formula for the standard deviation is:

__________
/ 3 (xi ! Gx )2
SD(X) = s = / _________ .
r
n

Here is how to use the formula.

Set up a worksheet like the one shown below.

2.

In the first column, list the values of the variable X for each of the n cases. (This is the raw
data.)

3.

Find the mean value of the variable in the data, by adding up the values in each case and
dividing by the number of cases.

4.

In the second column, subtract the mean from each value to get, for each case, the deviation
from the mean. Some deviations are positive, others negative, and (apart from rounding
error) they must add up to zero; add them up as an arithmetic check.

5.

In the third column, square each deviation from the mean, i.e., multiply the deviation by
itself. Since the product of two negative numbers is positive, every squared deviation is nonnegative, i.e., either positive or (in the event a case has a value that coincides with the mean
value).

6.

Add up the squared deviations over all cases.

7.

Divide the sum of the squared deviations by the number of cases; this gives the average
squared deviation from the mean, commonly called the variance.

8.

The standard deviation is the (positive) square root of the variance. (The square root of x
is that number which when multiplied by itself gives x.)

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