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5 Measures of Dispersion

The document discusses various measures of dispersion or variability that can be used to analyze ungrouped data, including range, variance, standard deviation, and coefficient of variation. It provides the formulas for calculating each measure and works through an example using annual revenue data from Starbucks from 2011 to 2020, calculating the range, variance, standard deviation, and coefficient of variation. The standard deviation of the Starbucks data is $5,104.36 and the coefficient of variation is 26%, indicating 26% variation from the mean.

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Mark Emil Barit
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85 views14 pages

5 Measures of Dispersion

The document discusses various measures of dispersion or variability that can be used to analyze ungrouped data, including range, variance, standard deviation, and coefficient of variation. It provides the formulas for calculating each measure and works through an example using annual revenue data from Starbucks from 2011 to 2020, calculating the range, variance, standard deviation, and coefficient of variation. The standard deviation of the Starbucks data is $5,104.36 and the coefficient of variation is 26%, indicating 26% variation from the mean.

Uploaded by

Mark Emil Barit
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MEASURES OF DISPERSION

OR VARIABILITY
(Ungrouped Data)

Ms. Stephanie T. Gozano-Quiambao


Recall:
Measures of Central Tendency
✓ Mean
✓ Median
✓ Mode
❖ They indicate the “average” or
“central” or “typical” value in
a set of data.
Ms. Stephanie T. Gozano-Quiambao
Measures of Dispersion
✓ Dispersion is concerned with how
“close together” or “far apart”
observed values are.
✓ It is the spread or scatter of values
from the Measures of
Central Tendency. It is designed to
state the extent to which
observations (or items) vary from
their average.
Ms. Stephanie T. Gozano-Quiambao
Methods of Measuring Dispersion
✓ Range
✓ Variance
✓ Standard Deviation
✓ Coefficient of Variation

Ms. Stephanie T. Gozano-Quiambao


Example: Starbucks Annual Revenue
The following (Million of US $)
data are the Year Revenue
Starbucks 2020 $23,518
2019 $26,509
Annual 2018 $24,720
Revenue from 2017 $22,387
2011 to 2020. 2016 $21,316
2015 $19,163
2014 $16,448
Source: 2013 $14,867
macrotrends.n 2012 $13,277
2011 $11,700
et/stocks/star
bucks/revenue
Ms. Stephanie T. Gozano-Quiambao
Range: Starbucks Annual Revenue
It is defined as (Million of US $)
Year Revenue
the difference 2020 $23,518
between the 2019 $26,509
smallest and the 2018 $24,720
largest 2017 $22,387
observations in a 2016 $21,316
2015 $19,163
given set of data.
2014 $16,448
Formula: 2013 $14,867
2012 $13,277
R = HS - LS 2011 $11,700
R = 26509 - 11700
R = 14,809 Ms. Stephanie T. Gozano-Quiambao
Variance:
The variance or the mean square deviation
is the expected value of the squared deviation
of an observation from its mean.
where:
Formula: x = observed value
σ x − xlj 2 xlj = sample mean
2
s = 𝜇 = population mean
N−1
s2 = sample variance
2
σ x−𝜇
2
𝜎 = 𝜎 2 = population variance
N N = number of data

Ms. Stephanie T. Gozano-Quiambao


Variance:
x x − xlj x − xlj 2
23,518 4,127.50 17036256.25
26,509 7,118.50 50673042.25
24,720 5,329.50 28403570.25
22,387 2,996.50 8979012.25
21,316 1,925.50 3707550.25
19,163 227.50 51756.25
16,448 2,942.50 8658306.25
14,867 4,523.50 20462052.25
13,277 6,113.50 37374882.25
11,700 7,690.50 59143790.25
𝑥ҧ = 19,390.50 ෍(𝑥 − 𝑥)ҧ 2 = 234490218.50
Variance: 2
2
σ 𝑥 − 𝑥lj
Formula: 𝑠 =
𝑁−1

Solution:
෍(𝑥 − 𝑥)ҧ 2 = 234490218.50

2
234490218.50
𝑠 =
10 − 1

𝑠 2 = 26054468.72
Ms. Stephanie T. Gozano-Quiambao
Standard Deviation:
It is the square root of the variance.
Formula: where:
s2 = sample variance
s= s2 2 = population variance
𝜎
𝜎= 𝜎2 s = sample SD
𝜎 = population SD

Ms. Stephanie T. Gozano-Quiambao


Standard Deviation:
Formula: s = s2
Solution:
𝑠 2 = 26054468.72

s = 26054468.72

s = 5,104.36

Ms. Stephanie T. Gozano-Quiambao


Standard Deviation:
Formula: s = s2
Solution:

s = 26054468.72

s = 5,104.36

Ms. Stephanie T. Gozano-Quiambao


Coefficient of Variation:
It is used to express the standard
deviation as a percentage of the mean.

Formula:
𝑠
𝐶𝑉 = (100%)
𝑥lj
where:
s = standard deviation
𝑥lj = mean
Ms. Stephanie T. Gozano-Quiambao
Coefficient of Variation:
𝑠
Formula: 𝐶𝑉 = (100%)
𝑥lj
Solution:
s = 5,104.36 𝑥ҧ = 19,390.50
5,104.36
𝐶𝑉 = (100%)
19,390.50
Thus, the Starbucks
Annual Revenue has 26%
𝐶𝑉 = 26%
variation from the mean
Ms. Stephanie T. Gozano-Quiambao

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