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DISPERSION

Dispersion refers to the extent of data scatter from the mean, indicating volatility levels. Key measures of dispersion include range, standard deviation, and variance, each with specific merits and demerits. Coefficient of variation is used to compare variability across different data series.

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9 views5 pages

DISPERSION

Dispersion refers to the extent of data scatter from the mean, indicating volatility levels. Key measures of dispersion include range, standard deviation, and variance, each with specific merits and demerits. Coefficient of variation is used to compare variability across different data series.

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hobbysinger05
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DISPERSION

Dispersion means the distance of the scattered data from


the mean or average value of the data.
Dispersion means the distance of the scattered data from the
central value (mean) of the data.
It gives information regarding the volatility or non-volatility
nature of the data set.
More distance from the central point represents a more volatile
nature and vice versa.
Measure of dispersion can be absolute or relative. Absolute
measures have the same unit of measurement as the given
dataset, while relative measures are expressed as ratios and
percentages.
Measures of dispersion are needed basically,
i) to determine the reliability of data.
ii) serves as a tool to control the variability
iii) to compare two or more series with respect to variability.
iv) many statistical tools are based on it.
Properties:
1.It should be simple and easy to compute.
2. It should be rigidly defined.
3. It should be based on all observation.
4. It must have sampling stability.
5. It should not be affected by extreme observations.

Methods of studying variation:


1.RANGE:
The range is the simplest measure of dispersion. It is the
Rough measure of dispersion.
Its measure depends upon the extreme items and not on all
the items.
Range = Largest value – smallest value.
R= l -- S
Co – efficient of range = l -- S
I + S
Ex: Find the range.
27,30,35,36,38,40,43
R= l -- S
R = 43 - 27 = 16
Co – efficient of range = 43 – 27 = 0.23
43 + 27

Merits:
1. It is simple to calculate and understand.
2. It gives a rough but quick answer.
3. Range is used in industries for the statistical quality control.
4. Range is useful in studying the variations in the prices of
Shares.
5. The meteorological department uses the range for weather
forecasts
Demerits :
1. It is not reliable, because it is affected by extreme items.

STANDARD DEVIATION:
Standard deviation measures the average distance of
data points from the mean of the dataset.
A high standard deviation indicates that the data points
are spread out .
A low standard deviation indicates that the data points
are spread out closely around the mean.
Standard deviation is defined as the positive square
root of the mean square deviation of the variables
measured from the mean. It is denoted by  .
A small S.D means high degree of uniformity.
A high S.D means less degree of uniformity.
Merits:
1. S.D is based on all observations.
2. It is less affected by sampling fluctuations.
3. It gives the result of high degree of accuracy.
4. It is used in estimation and testing of hypothesis.
Calculation:
1. Find the actual mean ( x )
2. Find the deviation of each value from the mean.( x -- x )2
3. Square the deviations and find the sum ie  ( x -- x )2
4. Divide the total by the number of observations.  ( x -- x )2
N
5. Apply the formula  ( x -- x )2
 N
VARIANCE:
Square of standard deviation is called variance.
Variance = 2 .
Coefficient of variation:
It is the percent variation in mean.
It shows the relationship between the S.D and the
arithmetic mean expressed in terms of percentage.
C.V =  X 100
X
We use C.V for comparing two or more series.
The series for which C.V is greater, indicates that the
Series is more variable, less stable, less uniform,less
Homogeneous.
The series for which C.V is less, indicates that the
Series is less variable, more stable, more uniform,
More Homogeneous.

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