Lecture Five - Docx Measure of Dispersion

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Lecture five

Measures of Dispersion
Definition
Measures of dispersion are a procedure by which we
mean the extent to which the observation in a sample
or in a population varies about their mean. A
quantity that measures these characteristics is called
a measure of dispersion, scatter or variability.
There are two types of measures of dispersion:
absolute and relative.
An absolute measure of dispersion is one that
measures the dispersion in terms of the same units or
in the square of units. For example, if the units of
data are rupees, meters, kilograms, ect.
A relative measure of dispersion is one that is
expressed in the form of ratio, co-efficient or
percentage and is independent of units of
measurement. It is useful for comparison of the data
of different nature.
The main measures of dispersion (Absolute MD) are
as follow:
• The Range.
• Quartile Deviation.
• The Variance and Standard Deviation
The main measures of dispersion (Relative MD) are
as follow:
• Coefficient of Range.
• Coefficient of Quartile Deviation.
• Coefficient of variation

• The Range.

The range R, is defined as the difference between the


largest and the smallest observations in a set of data.
This is an absolute measure of dispersion.
R = xm – x0
Where xm for largest value and x0 denotes the
smallest value.
Its relative measure known as the Co-efficient of
range.
• Quartile Deviation.
The Interquartile range is a measure of dispersion,
defined by the difference between the third and first
quartile; and half of this range is called the semi
Interquartile range (S.I.Q.R) or quartile deviation
(Q.D). The quartile deviation is also an absolute
measure of dispersion.

Its relative measure of dispersion is called the co-


efficient of quartile deviation.
Co-efficient of QD = Q3-Q1 / Q3+Q1
Example:

Q1 = 25 Q3 = 45
Calculate Quartile deviation and co efficient of
Quartile Deviation.

• The Mean Deviation.


• The mean deviation (M.D) of a set of data is
defined as the airthmetic mean of the deviatons
measured either from the mean or from median,
all deviations as positive. The sum of deviations
of the observations from their mean is zero.
Mean deviation is an absolute measure of
dispersion.
M.D =
Its relative measure of dispersion is called Co-
efficient of mean deviation.
Co-efficient of mean deviation =
• The Variance and Standard Deviation:
The variance of a set of observations is defined
as the mean of the squares of deviations of all
the observation from their mean. When it is
calculated from entire population, the variance is
called population variance and denoted by a
Greek letter “σ2” (sigma). If, instead the data
from the sample are used to calculate the
variance, it is referred as the sample variance
and denoted by “s2”.
The positive square root of the variance is called
Standard deviation.

The standard deviation is expressed in the same unit


as the observations themselves and is a measure of
the average spread around the mean. Standard
deviation is affected by extreme values. Standard
deviation is an absolute measure of dispersion.
Co-efficient of variation
The variability of two or more than two sets of data
cannot be compared unless we have a relative
measure of dispersion. For this purpose, Karl
Pearson (1857-1936) introduced a relative measure
of variation known as the co-efficient of variation,
abbreviated C.V. which expresses the standard
deviation as a percentage of arthimetic mean of a
data set. Symbolically it is defined as

C.V =
SD
 100
x

Interpretation of standard deviation


The standard deviation is a very important concept
that serves as a basic measure of variability. A
smaller values of the standard deviation indicated
that most of the observations in a data set are close
the mean while a large value implies that the
observation are scattered widely about mean.

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