STATISTICAL RESEARCH AND TRAINING CENTER

J and S Building, 104 Kalayaan Avenue, Diliman, Quezon City

Training Course on
Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011

Measures of Variation

Prepared by:
Prof. Josefina V. Almeda
College Secretary
School of Statistics
University of the Philippines, Diliman
2011
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Learning Objectives
After the session, participants should be able to:
 Gain skills in the computation of the different
quantitative measures of dispersion;
 Describe and compare groups and individuals within
groups using the measures of dispersion;
 Interpret results obtained from each measure

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 3

Measures of Dispersion
 indicate the extent to which individual items in a
series are scattered about an average.

1. Measures of Absolute Dispersion

 Use to compare two or more data sets with the
same means and the same units of measurement.
2. Measures of Relative Dispersion
 Used to compare two or more data sets with
different means and different units of
measurement.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 4
Measures of Variation
Variation

Variance Standard Deviation Coefficient of

Population Variation
Range Population
Variance Standard
Deviation
Sample Sample
Variance Standard
Deviation
Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 5
Measures of Absolute Dispersion

Range

Standard deviation

Variance

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 6
Range

• Difference Between Largest & Smallest

Observations:
Range = X Largest - X Smallest

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 Example: Given below are the weights in pounds of five 7
babies below 1 yr. old from Health Center 1, get the
range.

10 pounds 12 pounds 14 pounds 16 pounds 20 pounds

lightest heaviest
Health Center 1
Solution: The maximum or heaviest baby is 20 pounds and the
minimum or lightest baby is 10 pounds. Thus, the
weight range of babies is
heaviest – lightest = 20-10 = 10 pounds

We can say that the weights of babies range from 10 to 20

pounds.
Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 Example: Given below are the weights of 5 babies from 8
health center 2. Compare the weight range of the babies
from health center 1 given in the previous example and
health center 2.

12 pounds 12 pounds 14 pounds 12 pounds 16 pounds

Health Center 2

Solution: Weight range of babies in Health Center 1:

heaviest – lightest = 20 – 10 pounds
Weight range of babies in Health Center 2:
heaviest - lightest = 16 - 12 = 4 pounds

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
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Characteristics of the Range

1. Simple, easy to compute and easy-to-understand

measure.

2. It uses only the extreme values. It fails to communicate

any information about the clustering or the lack of
clustering of the values between the extremes.

3. A weakness of the range is that an outlier can greatly

alter its value.

4. It cannot be approximated from open-ended frequency

distributions.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 10

5. It is unreliable when computed from a frequency

distribution table with gaps or zero frequencies.

6. It is not tractable mathematically.

7. Tends to be smaller in smaller samples than in large

samples.

8. Used chiefly in control of production, expressing the

stock prices and interest rates, etc.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 11
Variance
 Important measure of variation
 Shows variation about the mean

• Sample variance: n

 X X
2
i
S2  i 1

n 1
• Population variance: N

 Xi   
2

2  i 1

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 12
Standard Deviation

 is the positive square root of the variance and

measures on the average the dispersion of each
observation from the mean.

 Most important measure of variation

 Shows variation about the mean
 Has the same units as the original data
 It is always positive

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 13
Standard Deviation

 X X
2
• Sample standard deviation: i
S i 1

n 1

• Population standard deviation: N

 X 
2
i
 i 1

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 14
Calculating the Sample SD

 X X
2 For the Sample : use n - 1
S = i
in the denominator.
n 1

Data: Xi : 10 12 14 15 17 18 18 24

n=8 Mean =16

s= (10  16) 2  (12  16) 2  (14  16) 2  (15  16) 2  (17  16) 2  2(18  16) 2  (24  16) 2
8 1

= 4.2426
Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 15
Sample vs Pop’n SD

Data : Xj 10 12 14 15 17 18 18 24
N= 8 Mean =16

s =  X X = 4.2426
2
i

n 1

 

 iX    2
= 3.9686
N
Value for the Standard Deviation is larger for data considered as a Sample.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 16
Standard Deviation

Remarks:
1. If there is a large amount of variation in the data
set, then on the average, the data values will be far
from the mean. Hence, the standard deviation will
be large.
2. Ifthere is only a small amount of variation in the
data set, then on the average, the data values will be
close to the mean. Hence, the standard deviation
will be small.
Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 17
Comparing Standard Deviations

Data A Mean = 15.5

s = 3.338
11 12 13 14 15 16 17 18 19 20 21

Data B
Mean = 15.5
11 12 13 14 15 16 17 18 19 20 21 s = .9258
Data C
Mean = 15.5
11 12 13 14 15 16 17 18 19 20 21 s = 4.57
Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 18
Comparing Standard Deviations

Example: Team A - Heights of five marathon players in inches

Mean = 65
s =0

65 “ 65 “ 65 “ 65 “ 65 “

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 19
Comparing Standard Deviations

Example: Team B - Heights of five marathon players in inches

Mean = 65”
s = 3.6”

62 “ 67 “ 66 “ 70 “ 60 “

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 20
Standard Deviation
Advantages
11. It is the most widely used measure of
dispersion. It is based on all the items and is
rigidly defined.
2. It is of great significance for testing the
reliability of measures calculated from
samples, the difference between such
measures, and in comparing the extent of
fluctuation in two or more samples.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 21
Standard Deviation
Disadvantages
1. The standard deviation is sensitive to the
presence of extreme values.

2. It is not easy to calculate by hand.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 22
Inter-Quartile Range (IQR)

The difference between the third quartile and

first quartile, i.e.
IQR = Q3 – Q1
Example: Pulse rates of 15 residents of a certain
village

54 58 58 60 62 65 66 71
74 75 77 78 80 82 85

IQR = 78 - 60 = 18

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 23

Some Properties of IQR

 Reduces the influence of extreme

values.
 Not as easy to calculate as the
Range.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 24
Measure of relative dispersion

 are unitless and are used to compare the

scatter of one distribution with the scatter of
another distribution.

Coefficient of Variation
 utilizes two measures and these are the mean and
the standard deviation.
 is a percentage

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
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The formula of the coefficient of variation is given as,


population CV = x100%


where  is the population standard deviation

 is the population mean

s
sample CV = x 100%
x

where s is the sample standard deviation

x is the sample mean

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 26

Example: To illustrate, you want to buy a stock and you have the
option to select one out of the two. The given information is that
Stock 1 is priced at P2000 per share and stock 2 is priced at P550
per share. In buying stocks, we lessen the risk by selecting a stock
that has less variable price. On the other hand, if we want to take a
chance that the price of the stock will go up, then we would want the
stock that has more varied price. Let’s say a sample of price of Stock
1 and Stock 2 was collected at the close of trading for the past
months and the following statistics were obtained:
Stock Mean Price Standard Deviation
1 P1975 P578
2 P 565 P 85

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
 27

To determine which of the two stocks have a more variable price, we

compute for the coefficient of variation.
578 85
CVstock1 = x100  29.2 % CVstock2 = x 100  15.04%
1975 565

Stock 1 price is more variable than stock 2 price. As a matter of fact,

stock 1 price is almost twice as variable as stock 2 price.

Statistical Research and Training Center Training Course on Basic Statistical Analysis Using MS Excel 2007
March 28 to April 1, 2011
Thank you.