Set 2

MEASURES OF DISPERSION
INTRODUCTION
Dispersion also known as scatter, spread or variation measures the extent towhich the items
vary from some central value. Since measures of dispersiongive an average of the differences
of various items from an average, they arealso called averages of the second order.
SIGNIFICANCE OF MEASURING DISPERSION
Measures of variation are needed for four basic purposes:
1. To determine the reliability of an average.
2. To serve as a basis for the control of the variability.
3. To compare two or more series with regard to their variability.
4. To facilitate the use of other statistical measures (correlation analysis, the testing of
hypothesis, the analysis of variance, regression analysis).

PROPERTIES OF A GOOD MEASURE OF VARIATION

It should be simple to understand.
It should be easy to compute.
It should be rigidly defined.
It should be based on each and every item of the distribution.
It should be amenable to further algebraic treatment.
It should have sampling stability.
It should not be unduly affected by extreme items.

DIFFERENT MEASURES OF DISPERSION

An absolute measure of dispersion is expressed in terms of the units of measurement of the
variable. The relative measure of dispersion generally known as coefficient of dispersion is
expressed as a pure number independent of the units of measurement of the variable.
The main disadvantage of the absolute measures of dispersion is that it cannot be used to
compare the variability of two distributions expressed in different units.
Comparison of distributions with regard to their variability from the central value is done by
relative measures of dispersion.
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AM
BE
S
OU
LR
US
TO
EF
MD
ES
AE
S
UO
RN
E
S

P
R

I. RANGE
It is defined as the difference between the value of the smallest item and the value of the
largest item included in the distribution.
Range = L S
L = Largest value in the distribution
S= Smallest value in the distribution
In case of continuous frequency distribution:
Range is calculate:
By subtracting the lower limit of the lowest class from the upper limit of the highest
class.
OR
By subtracting the mid value of the lower class from mid value of the highest class.

Coefficient of Range

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It is a relative measure of dispersion and used to compare series in different units.

Coefficient of Range = Max value Min value
Max value + Min Value
=
Absolute range
Sum of extreme values
= (L S)
( L + S)
USES OF RANGE
Quality Control
The idea basically is that if the range the difference between the largest and smallest mass
produced items increases beyond a certain point, the production machinery should be
examined to find out why the items produced have not followed their usual more consistent
pattern.
Fluctuations in the share prices
Range is useful in studying the variations in the prices of stocks and shares and other
commodities that are sensitive to price changes from one period to another.
Weather forecasts
The meteorological department does make use of the range in determining the difference
between the minimum temperature and the maximum temperature.

II. INTERQUARTILE RANGE AND QUARTILE DEVIATION

The quartiles are the values which divide the whole distribution into four equal parts.
Interquartile Range= Q3 Q1
Quartile Deviation or Q.D. = Q3 Q1
(Semi-Interquartile Range)2
Coefficient of Q.D. = (Q3 Q1)/2 = Q3 Q1
(Q3+Q1)/2
Q3+Q1

Q1 is the first(or lower) quartile and Q3 is the third(or upper) quartile.

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It represents the difference between the third quartile and the first quartile.

For symmetrical distributions,

Q3 Median = Median Q1

2 Median = Q3 + Q1 =

Q3 + Q1 +Q1 - Q1 = (Q3 - Q1) + 2Q1

Median = Q1 + Q3- Q1
2
= Q1 + Quartile Deviation [ Quartile deviation = + Q3- Q1]
2
2 Median = Q3 + Q1 +Q3 Q3 = 2Q3 (Q3-Q1 )

Median =

Q3 ( Q3- Q1)
2
= Q3 - Quartile Deviation [ Quartile deviation = + Q3- Q1]
2
Hence, for symmetrical distributions
Median = Q1 + Quartile Deviation
Median = Q3 - Quartile Deviation

For asymmetrical distributions,

Median Q1 + Quartile Deviation
Median Q3 - Quartile Deviation

Note: The greater the difference between these values, the greater would be the dispersion in
the distribution.
Merits of Quartile Deviation
1.
2.
3.
4.

It is simple to understand and easy to compute.

The quartile deviation is more stable than range.
It is not affected by two extreme values.
It can be computed even if the distribution has unequal class intervals.

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5. It can be computed in case of open- ended distribution.

Demerits of Quartile Deviation
1. It is not based on all the observations of a series because it does not take frequencies
below the lower quartile and above the upper quartile into consideration.
2. It is affected by sampling fluctuations.
3. It is a distance on the scale and is not a measure from average. Therefore, it fails to
show variations around an average.
USE
The quartile deviation, as a measure of dispersion, is mainly employed in open ended
distributions. In many situations, we encounter such distributions because of the need to
keep certain information confidential.

III. MEAN DEVIATION

The mean deviation is also known as the average deviation. It is the average difference
between the items in a distribution and the median or mean of that series.
Computation of Mean Deviation Individuals Observations
If X1, X2, X2 XN areN given observations then the deviation about an average A is
given by
M.D. = 1 | X A |
N
Where | D | = | X A | read as mod (X - A) is the modulus value or absolute value of the
deviation ignoring plus and minus signs.
A is the mean or median value.
Computation of Mean Deviation Discrete Series
M.D. = 1 f | D |
N
Where f is the respective frequency of each variable and
| D | = | X A|

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Computation of Mean Deviation Continuous Series

M.D. = 1 f | D | X i
N
Where f is the respective frequency of each variable and
| D | = | m A|
i
Here, m denotes the mid value of the respective class.
i is the value of the class interval

Classes
0-10
10-20
20-30
30-40
40-50
Total

Frequency
1
3
5
4
2
15

Mid values
5
15
25
35
45

fX
5
45
125
140
90
405

D
-22
-12
-2
8
18

fD
-22
-36
-10
32
36

Calculation
Mean = 405/15=25
Mean deviation= 1/N f (X-X)
=1/15*136
=9.07

COEFFICIENT OF MEAN DEVIATION

When mean is used as a reference point,
Coefficient of Mean Deviation = Mean Deviation
Mean
When median is used as a reference point,
Coefficient of Mean Deviation = Mean Deviation
Median
OR we can say,
Coefficient of Mean Deviation = Mean Deviation
Decision Sciences

f|D|
22
36
10
32
36
136

Set 2

Average Used

Merits:
1. The mean deviation takes all the values into consideration
2. It is fairly stable compared to range or quartile deviation
Demerits:
1. It is not stable like standard deviation
2. Mean deviation ignores signs of deviation
3. It is not possible to use it for further statistical analysis

IV. STANDARD DEVIATION

It is the square root of the mean of the squared deviations from the arithmetic mean. It is
denoted by the small Greek letter (sigma).
The standard deviation measures the absolute dispersion (or variability of a distribution;
the greater the amount of dispersion or variability) the greater the standard deviation, for
the greater will be the magnitude of the deviations of the values from their mean.
A small standard deviation means a high degree of uniformity of the observation as well
as homogeneity of a series; a large standard deviation means just the opposite.

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As shown in the figure,

68.26% of the observations of a normal population will be found within 1 standard
deviation of the mean.
95.46% of the observations will be found within 2 standard deviations, while
99.73% will be found within 3 standard deviations.
of Deviations
Mean
STANDARD DEVIATION =

Number of Observations
In symbols,

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Deviations taken from Assumed Mean

Calculation of Standard Deviation Discrete Series

1. Actual mean method

2. Assumed mean method

3. Step deviation method

Calculation of Standard Deviation Continuous Series
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10

When we are asked to take a particular value as assumed mean, we must make
calculations from that value only

Relation between Measures of Dispersion

Quartile Deviation (Q.D.) = 2/3 (Standard Deviation)
MeanDeviation (M.D.) = 4/5 (Standard Deviation)
Another comparison can be made of the proportion of items that are typically included
within the range of Q.D., M.D. or S.D. measured both above and below the mean.
In a normal distribution,

Q.D. includes 50 per cent of the items

M.Dincludes 57.51 per cent of the items
S.Dincludes 68.27 per cent of the items
Variance

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