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Measure of Dispersion
Measure of Dispersion
Measure of Dispersion
SALAH DEPARTMENT
OF UDDIN,
FOR BUSINESS
MANAGEMENT
INFORMATION SYSTEMS
UNIVERSITY
DHAKA
!he above formula can be e"tended to find out the standard deviation of three or more groups. #or e"ample, combined standard deviation of three groups: 12$ = N 1 1 2 + N 2 2 2 + N $ $ 2 + N 1 d 1 2 + N 2 d 2 2 + N $ d $ 2 N1 + N 2 + N $
Example: !he number of wor%ers employed, the mean wage &in dollars' per wee% and the standard deviation &in dollars' in each branch of a company are given below. Calculate mean wages and standard deviation of all the wor%ers ta%en together for company. (ranch A B C Solution:
X 12$ = = N1 X 1 + N 2 X 2 + N $ X $ N1 + N 2 + N $
12$ =
Page 1 of 11
FOR BUSINESS
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r =
f (x
i =1 i
x)
, where f i = N .
when r = 1 , then 1 = + . If r = 2 , then 2 = 2 , the variance. Raw moments: !he r5th moment about any point a is defined by
r7 =
In particular
f (x
i =1 i
a)
, where f i = N .
+ =
f (x
i =1 i
x) a)
f
N
N =1 N N =1 N
i
+7 =
f (x
i =1 i n i i
N x) a)
x)
2
f
N
i
1 =
=
7 1
f (x
i =1
f x f x = x Nx = x x = +
i
f (x
i =1 i
fx
i
a = xa
8 d &deviation'
2 =
f (x
i =1 i
=2
&variance'
1 $ = $ $ 27 17 + 2( 17 )
$ 2 , 2 $ ,
r = r7 r C1 r7 1 17 +r C 2 r7 2 ( 17 ) r C$ r7 $ ( 17 ) +r C , r7 , ( 17 )
, = ,7 , $7 17 + - 27 ( 17 ) $( 17 )
SKEW ESS
Page 2 of 11
FOR BUSINESS
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Skewness: %ewness is the lac% of symmetry of a distribution. If the fre4uency curve of a distribution has a longer tail to the right of the central ma"imum than to the left, the distribution is said to be s%ewed to the right, or to have positive s%ewness. If the reverse is true, it is said to be s%ewed to the left, or to have negative s%ewness. 1st Coefficient of %ewness, 1 8
mean 5 mode x mod e = standard deviation ( ) ( $ mean 5 median $ x median ) = 2nd Coefficient of %ewness, 1 = standard deviation
With the help of moments s%ewness can be determined, :arl ;earson suggested
1 =
#or symmetrical distribution 1 = + < distribution is said to be s%ewed if &i' mean, median and mode give different values. &ii' Q1 and Q$ are not e4uidistant from median & Q2 '.
K!R"#S$S
Kurtosis: !he degree of pea%ness or flatness of a distribution relative to a normal distribution is called %urtosis. :urtosis, 2 =
#or normal distribution, if 2 = $ then the curve is meso%urtic if 2 > $ then the curve is lepto%urtic if 2 < $ then the curve is platy%urtic
, 22
%roblem &': !he first four moments of a distribution about the value * of the variable are 2, 2+, ,+ and *+respectively. how that the mean is .. <lso find the moments about mean, s%ewness and %urtosis. Solution: =iven that A = *, 17 = 2, 27 = 2+, $7 = ,+ and ,7 = *+
Page 3 of 11
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1 = +
x = 17 + A = 2 + * = .
1 7 $ = $ $ 2 17 + 2( 17 ) = ,+ $ 2 2+ + 2 2 $ = -, 2 ,
$2 ( .2 ) 2 *10, = = = 1.2-* $ ,+/2 (1-) $ , 1-2 1-2 = = +.-$ and %urtosis, 2 = 2 = 2 (1- ) 2 2*s%ewness, 1 =
7 7 , = , , $7 17 + - 2 ( 17 ) $( 17 ) = *+ , ,+ 2 + - 2+ 2 2 $ 2 , = 1-2
%roblem &(: #irst central moments of a distribution are +, 1-, 5$- and 12+. Comment on the s%ewness and %urtosis of the distribution. Solution: =iven that 1 = + , 2 = 1- , $ = $- , , = 12+ Coefficient of s%ewness, 1 = 1 =
$
$ 2
$= +.*-2* ,$
!he distribution is negatively s%ewed. , 12+ = +.,-/ %urtosis, 2 = 2 = 2 (1- ) 2 ince 2 < $ the distribution is platy%urtic. %roblem &): #ind s%ewness and %urtosis of the following distribution Wages Wor%ers 2+>$+ . $+55,+ 1+ ,+55*+ 1* *+55-+ 0 -+55.+ 0 .+550+ 2
3id
xi
value fre4uency
fi
xi ,* = d
fi di
f i d i2
2* $* ,*
. 1+ 1*&8a'
52+ 51+ +
5,+ 51++ +
20++ 1+++ +
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** -* .*
0 0 2
1+ 2+ $+
i
0+ 1-+ -+
= *+
f d
i
= -+
f d
i
2 i
=/-++
3ean, x = a +
Mode = L +
f1 f + 1* 1+ *+ i = ,+ + 1+ = ,+ + = ,,.1. 2 f1 f + f 2 $+ 1+ 0 12
fd f
i i
= ,* +
-+ = ,-.2 *+
fd = /-++ $-++ = 1/2 1.,, = 1$.0 tandard ?eviation & .?' 8 8 f *+ 2*++ mean 5 mode ,-.2 ,,.1. = = +.1,. s%ewness, 1 8 standard deviation 1$.0
2 2
fd f
C#RRE*+"$# + D RE,R+"$#
Correlation: If two variables " and y vary in such a way that an increase in the one is accompanied by an increase or decrease in the other, then the variables are said to be correlated. <n analysis of the covariation of two or more variables is usually called correlation. "-ere are various t.pes o/ correlation:
Page 5 of 11
FOR BUSINESS
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0i1%ositive correlation: If one variable is increasing the other on an average is also increasing or, if one variable is decreasing the other on an average is also decreasing, then the correlation is said to be positive. " 0+ .+ -+ ,+ $+ @ *+ ,* $1 2+ 1+
0ii1 e2ative Correlation: If one variable is increasing the other is decreasing or vice versa, then the correlation is said to be negative. " 1++ /+ -+ ,+ $+ @ 1+ 2+ $+ ,+ *+
0iii1 *inear correlation: If the amount of change in one variable tends to bear a constant ratio to the amount of change in the other then the correlation is said to be linear. 0iv1 on3linear: If the amount of change in one variable does not bear a constant ratio to the amount of change in the other then the correlation is said to be non5linear. "-ere are various t.pes o/ met-ods o/ stud.in2 correlation: &i' catter diagram 3ethod; &ii' :arl ;earsonAs Coefficient of Correlation; &iii' pearmanAs 9an% Coefficient Correlation; and &iv' 3ethod of Beast 4uare 0i1Scatter dia2ram Met-od: !he simplest method for studying correlation in two variables is a special type of dot chart called scatter diagram. When this method is used the given data are plotted on a graph paper in the form of dots. If all the points lie on a straight line falling from the lower left5 hand corner to the upper right5hand corner, correlation is said to be perfectly positive. Cn the other hand if all the points lying on a straight line rising from the upper left5 hand corner to the lower right5hand corner, correlation is said to be perfectly negative. 0ii1 Karl %earson4s Coe//icient o/ Correlation: :arl ;earsonAs coefficient of correlation &r' between two variables " and y is defined by
Page 6 of 11
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r=
where x and y are the respective means of x and y If deviations are ta%en from an assumed mean, then
r= N ( x a ) ( x a )
2
( x x )( y y ) ( x x ) ( y y )
2
N ( x a )( y a ) ( x a ) ( y a )
2 2
N ( y a ) ( y a )
0iii1 Spearman4s Rank Coe//icient Correlation: pearmanAs ran% coefficient correlation is defined by -d 2 R =1 N ( N 2 1) where d is the difference of two ran%s between paired items in two series. %robable Error: !he probable error of the coefficient of correlation is obtained by
r =1 r2 N
r 1 or
1 r +1
Page
of 11
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( a +b )
=1 + 2r +1 = 2(1 + r ) + 1 + r +
= a 2 + 2ab + b2
r 1.............&1'
( a b )
imilarly
=1 2r +1 = 2(1 r ) + 1 r + 1 r
= a 2 2 ab + b2
r 1...........& 2'
&;roved'
%roblem': !en students got the following percentage of mar%s in 3athematics and tatistics calculate the coefficient of correlation 3ath. tat. .0 0, $*1 /0 /1 2* -+ .* -0 02 -2 /+ 0-2 *0 -* *$ $/ ,.
Solution: Be the mar%s of two subDects be denoted by " and y respectively " .0 $/0 2* .* 02 /+ -2 -* $/
Page ! of 11
y 0, *1 /1 -+ -0 -2 0*0 *$ ,.
y y
( x x )2
1-/ 0,1 1+0/ 1-++ 1++ 20/ -2* / + -.-
( y y)2
$2, 22* -2* $, 1,++ -, 1-/ $-1
( x x )( y y )
2$, ,$* 02* 2,+ 2+ 5-0 *++ 2, + ,/,
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x = -*+ y =--+
Eere x =
*$/0
2
222,
2
2.+,
( x x )( y y ) = 2.+,
r=
2
-*+ --+ = -* , y = = -- , 1+ 1+
( x x )
= *$/0 ,
( y y )
= 222, and
( x x )( y y ) ( x x ) ( y y )
&<ns.'
%roblem(: !he ran% of ten students in mathematics and statistics are given below calculate the coefficient of correlation tudent < 3ath. / tat. 1 ( 1+ 2 C $ ? * , F . * # 2 = , . E 0 0 I 1 / G $ 1+
/ 1+ * . 2 , 0 1 $
-d 2
1 2 $ , * . 0 / 1+
0 0 $ 1 2 5, 5$ + 50 5.
-, -, / 1 , 1/ + -, ,/
We %now R = 1
N N 1
2
=1
Page " of 11
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RE,RESS$# Re2ression: If the scatter diagram indicates some relationship between variables " and y, then the dots of the scatter diagram will be concentrated round a curve. !his curve is called the curve of regression. !he method which used for estimating the un%nown values of one variable corresponding to the %nown value of another variable is called regression analysis. E6uation o/ re2ression line: !he average relationship between " and y can be described by the linear e4uation y = a + bx whose geometrical presentation is a straight line. !he values of a and b are given by the e4uations y = na + bx and
xy = a x + bx
%roblem &': Calculate the regression line from the following data " y Solution: ,.$ 12.,.* 12.1 *./ 11.*.11.0 -.1 11., *.2 11.0
x2
$.0 1$.2
2.1 1,.1
y
12.12.1
xy
*,.10 *,.,*
,.$ ,.*
Page 10 of 11
10.,/ 2+.2*
FOR BUSINESS
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UNIVERSITY
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x = $..*
y = /0.-
xy = ,*$.02
=100.+1
a and
b are given
and
xy = a x +b x
Page 11 of 11