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CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province
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SCHOOL OF BUSINESS AND ACCOUNTANCY

Instructional Module in
Statistical Analysis with Software Application

Lesson No. 4: Measures of Variability

Lesson Objectives

At the end of this lesson, the students are expected to:

a. answer multiple-choice tests about measures of variability;
b. compute measures of variability; and
c. compare data by analysing results of coefficient of variations.

Brief Introduction
One of the most important characteristics of a data set is how distributed, or how far each
element is from the measures of central tendencies (average). This is because not all elements
or values in the data set are equal to the mean. They possess variability that can tell how
homogeneous or heterogeneous the values in the distribution are.
Discussion
Variability measures the spread or dispersion of a set of data. It is use to determine how
much data values deviate from the mean.

1. Range
The range has been discussed from the previous lesson. It is the distance between the
lowest data point and the highest data point.
Example:
1. John Erick took 7 math tests in one marking period. What is the range of his test scores?
89, 73, 84, 91, 87, 77, 94
Solution: Look for the highest and lowest scores, then subtract the lowest score from the
highest score:
Highest (94) Lowest (73) Highest - lowest = 94 - 73 = 21
The range of the test scores is 21 points.
2. Variance and Standard Deviation
One of the most widely used measures of variability is the standard deviation. The more
spread apart the data, the higher the deviation. Standard deviation is calculated as the square
root of variance. Variance is a mathematical expectation of the average squared deviations
from the mean.

Sample variance and Sample for Ungrouped Data

Formulas:
(sample variance/ s2) X
2

∑ X −¿( ∑n )
2

s2= ¿
n−1

(sample standard deviation/s) 2

√
X
∑ X −¿( ∑n )
2

s= ¿
n−1
where: s2 = sample variance
s = sample standard deviation
X = the value of any particular observations or measurement
∑ X = sum of all X s
∑ X 2 = sum of all the square of X s
n = sample population
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CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province
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Example: The daily rates of a sample of eight employees at HLJ Inc. are P550, P420, P560,
P500, P700, P670, P860 and P480. Find the variance and standard deviation.
Solution:
Step 1: Get the sum of the data set.
X
550
420
560
500
700
670
860
480
∑ X=4740
Step 2: Square the values in the data set and get the sum.
X X2
550 302,500
420 176,400
560 313,600
500 250,000
700 490,000
670 448,900
860 739,600
480 230,400
∑ X=4740 ∑ X 2=2,951,400
Step 3: Apply the formula to obtain the values of variance and standard deviation.
2
X 4740 2
∑ X −¿( ∑n )
2
2,951,400−
8 2,951,400−2,808,450
s2= = = =20,421.42857 ≈ 20421.43 ¿
n−1 8−1 7

√
2
X
∑ X −¿( ∑n ) 4740

√
2
2,951,400−
8 2,951,400−2,808,450
s=
n−1
=
8−1
=
√ 7
= √20,421.42857 ≈ 142.90 ¿

Hence, the variance is P20,421.43 and the standard deviation is P142.90.

Sample Variance and Sample Standard Deviation for Grouped Data

(sample variance) s2=∑ f X 2−¿¿ ¿ ¿ ¿ ¿
(sample standard deviation) 2
√ s=∑ f X −¿ ¿ ¿ ¿ ¿ ¿ ¿
Example: Using the example provided from the previous lesson about HLJ Travel Agency,
determine the variance and standard deviation of the frequency distribution on the ages of 50
people taking travel hours.

Class Intervals f
18 - 26 3
27 - 35 5
36 - 44 9
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45 - 53 14
54 - 62 11
63 - 71 6
72 - 80 2
Solution:
Step 1: Determine the midpoints on each class intervals.
Class Intervals f X
18 - 26 3 22
27 - 35 5 31
36 - 44 9 40
45 - 53 14 49
54 - 62 11 58
63 - 71 6 67
72 - 80 2 76
Step 2: Determine the product fX.
Class Intervals f X fX
18 - 26 3 22 66
27 - 35 5 31 155
36 - 44 9 40 360
45 - 53 14 49 686
54 - 62 11 58 638
63 - 71 6 67 402
72 - 80 2 76 152
Step 3: Get the sum of product fX.
Class Intervals f X fX
18 - 26 3 22 66
27 - 35 5 31 155
36 - 44 9 40 360
45 - 53 14 49 686
54 - 62 11 58 638
63 - 71 6 67 402
72 - 80 2 76 152
Total 50 --- fX =2,459 ∑
Step 4: Multiply fX with X to obtain the product of f X 2
Class Intervals f X fX f X2
18 - 26 3 22 66 1,452
27 - 35 5 31 155 4,805
36 - 44 9 40 360 14,400
45 - 53 14 49 686 33,614
54 - 62 11 58 638 37,004
63 - 71 6 67 402 26,934
72 - 80 2 76 152 11,552
Total 50 --- ∑ fX =2,459 ∑ f X 2=129,761
Step 5: Apply the formula to obtain the value of the variance and standard deviation for grouped
data.

s2=∑ f X 2−¿¿ ¿ ¿ ¿ ¿

s= √∑ f X 2−¿ ¿ ¿ ¿ ¿ ¿ ¿

Hence, the variance and standard deviation is 180.15 and 13.42 respectively.
 CSTC COLLEGE OF SCIENCES TECHNOLOGY AND
COMMUNICATION, INC.
CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province
of Quezon R4A
Registrar’s Office: 042 3290850 / 042 7192818
CSTC IT Center: 042 7192805
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Population Variance and Population Standard Deviation

(population variance) σ 2=∑ X 2−¿ ¿¿ ¿ ¿ ¿
(population standard deviation) σ = 2
√∑ X −¿¿ ¿ ¿ ¿ ¿ ¿
where: σ 2 = population variance
σ = population standard deviation
X = the value of any particular observation
μ = population mean
N = population

Example: The monthly incomes of five research directors of Recoletos schools are: P55000,
P59500, P62500, P57000 and P61000.Find the variance and standard deviation.
Solution:
Solution:
Step 1: Get the sum of the data set.
X
55000
59500
62500
57000
61000
∑ X=295000
Step 2: Square the values in the data set and get the sum.
X X2
55000 3,025,000,000
59500 3,540,250,000
62500 3,906,250,000
57000 3,249,000,000
61000 3,721,000,000
∑ X=295000 ∑ X 2=17,441,500,000
Step 3: Apply the formula to obtain the values of variance and standard deviation.
2
X 295 , 0002
∑ X −¿( ∑ )
2
n
17,441,500,000−
5 17,441,500,000−17,405,000,000 36,500,000
σ 2= = = = =7,300,00
n−1 5 5 5

√ 295 , 0002
X
∑ X −¿( ∑ )
√
2
17,441,500,000−
n 5 17,441,500,000−17,405,000,000 36,500,000
σ=
n
=
5
=
√ 5
=
√ 5
=√ 7

Hence, the variance is P7,300,000 and the standard deviation is P2,701.85.

Note: After getting the value of variance, you can just get its square root to obtain the value of
standard deviation. On the other hand, if what you have is the value of standard deviation, just
get its square to obtain the value of variance.

Coefficient of Variation (CV)

For comparison on the variability between different sets of scores or data, coefficient of
variation would be very useful. This is used to express the standard deviation as a percentage
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CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province
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of the mean.
Formula:
S σ
CV = X 100% CV = X 100%
X μ
Example:
Stocks Average Price SD CV
A P500 P15 3%
B P1000 P150 15%
As shown on the table above, Stock B has a higher coefficient variation compared to
Stock A. We can conclude that Stock B is more dispersed than Stock A.
Activity
Answer the following:
A. Consider the following data. Compute for the range, sample standard deviation and sample
variance. (3 points for each measure)
1. 35, 31, 34, 33, 28, 36, 40, 43, 41, 46
2. 125, 112, 115, 117, 120, 122, 121, 109, 130
3. 78, 58, 62, 75, 78, 76, 77, 81, 85, 90, 68
4. 435, 437, 444, 449, 437, 450, 428, 445, 438, 429, 449
5. 99, 90, 87, 85, 78, 66, 65, 70, 88, 85

B. Solve the following problems.

1. The table below gives the frequency distribution of the daily commuting time (in minutes) from
home to work for a sample of 40 employees of a company. Determine the variance and
standard deviation.
Classes f
5 - 15 3
16 - 26 8
27 - 37 9
38 - 48 10
49 - 59 6
60 - 70 4

Sample variance (5 points):

Sample standard deviation (5 points):

2. The average sales per month of HLJ Computer company is P59 million with a standard
deviation of P8 million; the average sales volume of the company is 580 units per month, with a
standard deviation of 65 units. Compute and compare the variation of sales and sales volume of
the company.

Coefficient variation of sales (3 points):

Coefficient variation of sales volume (3 points):
Interpretation (4 points):

3. The average income of accountants in Manila is P45,000 per month with a standard deviation
of P2,500; the average income of programmers is P52,000 with a standard deviation of P3,000.
Compute and compare the variation of incomes.

Coefficient variation of accountants’ income (3 points):

Coefficient variation of programmers’ income (3 points):
Interpretation (4 points):

Reference
Cabero, J. et al. (2013). Business statistics. Mandaluyong City: Anvil Publishing, Inc.