Chapter 3

Measures of variation or dispersion: These measures help us to compare each value in the data
from the measure of central tendency to understand their variation. We can compare two data to
find out which one is more consistent than the other one. A lower measure of variation shows a
higher consistency for the data and a higher value shows more variability. They also act as
measures of risk, since risk is a type of variation. Some of the important measures of variation are:

(i) Range: This is the difference between the highest value and the lowest value in the data.
Though it is very easy to find, it gives very little information as we just compare only the lowest
value and the highest value.

(ii) Mean Deviation: Here we compare each value of the data with reference to the mean or
median or mode. Most commonly, we compare the values with the mean. A lower value of mean
deviation shows a lesser variation from the mean and more consistency in the values.

Consider an example.

X X – X bar mod (X – X bar)

5 1 1

4 0 0

3 -1 1

6 2 2

2 -2 2

X bar = ∑X/n = 20/5 = 4

We subtract each value of X from the mean and then take the modulus or absolute value of these
differences so that the total becomes positive. We then divide this total by the number of
observations to get the mean deviation.
Mean deviation = ∑(mod (X – X bar))/n = 6/5 = 1.2

For repeating values, mean deviation can be found as:

X f fX X -X bar mod (X –X bar) f * mod(X –X bar)

4 5 20 -0.4 0.4 2

6 3 18 1.6 1.6 4.8

3 2 6 -1.4 1.4 2.8

X bar = ∑fX/∑f = 44/10 = 4.4

Mean deviation = ∑f*mod(X –X bar)/ ∑f = 9.6/10 = 0.96

For class interval data, mean deviation can be found as:
Class f m fm m-X bar mod (m-X bar) f*mod (m-X bar)
0-10 3 5 15 -12 12 36
10-20 2 15 30 -2 2 4
20-30 5 25 125 8 8 40
X bar = ∑fm/∑f= 170/10 = 17
Here we subtract the mean from each of the mid-points and then take the modulus of these
differences.
Mean deviation = ∑f*mod(X –X bar)/ ∑f = 80/10 = 8
The advantage of mean deviation is that here we compare each value with the mean, and not just
only the highest and the lowest value as we do in the case of the range. But the limitation is that
we ignore the signs of the differences. This is taken care of in the next measure called as the
standard deviation where we do not ignore the signs of the differences, but still get it as a positive
value.

(iii) Standard deviation: Here also, we subtract each value of the variable from the mean, but
instead of taking the absolute values of these differences, we keep the signs as they are and take
the squares of these differences so that the total is positive.
We will see an example.
X X – X bar (X – X bar)2

5 1 1

4 0 0

3 -1 1

6 2 4

2 -2 4

X bar = ∑X/n = 20/5 = 4

Standard deviation σ = sqrt(∑(X – X bar)2/n) = sqrt(10/5) = 1.414

For repeating values, standard deviation can be found as:

X f fX (X –X bar) (X –X bar)2 f * (X –X bar)2

4 5 20 -0.4 0.16 0.8

6 3 18 1.6 2.56 7.68

3 2 6 -1.4 1.96 3.92

X bar = ∑fX/∑f = 44/10 = 4.4

Standard deviation σ = sqrt(∑f*(X –X bar)2/ ∑f) = sqrt(12.4/10) = 1.11

For class interval data, standard deviation can be found as:

Class f m fm m-X bar (m-X bar)2 f*(m-X bar)2
0-10 3 5 15 -12 144 432
10-20 2 15 30 -2 4 8
20-30 5 25 125 8 64 320
X bar = ∑fm/∑f= 170/10 = 17
Standard deviation σ = sqrt (∑f*(m –X bar)2/ ∑f) = sqrt(760/10) = 8.72

(iv) Variance: This is the square of the standard deviation

Variance = σ2
(v) Coefficient of variation: This is the most accurate measure of variation as it is based on the
standard deviation relative to the mean value, expressed as a percentage.
Coefficient of variation = (σ / mean)* 100
Consider the following example.

Data 1 Data 2

σ=5 σ=8

Mean = 50 Mean = 100

C.O.V= (5/50)*100 = 10% C.O.V = (8/100)*100 = 8%

Lower the coefficient of variation, higher is the consistency of the data. So, data 2 is more
consistent than data 1.

(vi) Quartile deviation: This measure considers the variation of the middle 25% of the values.

Quartile deviation = (Q3-Q1)/2

This is also called as semi-interquartile range.

Inter quartile range = Q3-Q1

Characteristics of an ideal measure of dispersion

(i) It should be easy to calculate.

(ii) It should be easy to understand.

(iii) It should be rigidly defined.

(iv) it should be based on all the observations.

(v) It should be capable of further mathematical treatment.

(vi) It should not be unduly affected by extreme observations.

(vii) It should not be much affected by fluctuations of sampling.

Solved Examples
Q1. Following are the scores obtained by 2 students A and B in 10 tests of 100 marks each.
Tests 1 2 3 4 5 6 7 8 9 10
Scores obtained 23 45 37 56 76 57 39 49 67 51
by A
Scores obtained 48 39 76 68 69 56 74 58 65 67
by B
If the consistency of performance is the criterion for awarding a prize, which student should get
the prize? Use coefficient of variation to measure the consistency.
Solution: A(X1) B(X2) (X1-X1 bar)2 (X2-X2 bar)2
23 48 729 196
45 39 25 529
37 76 169 196
56 68 36 36
76 69 676 49
57 56 49 36
39 74 121 144
49 58 1 16
67 65 289 9
51 67 1 25
X1 bar = 500/10 = 50
X2 bar = 620/10= 62
σ for A = √∑( X1-X1 bar)2 /n = √2096/10 = 14.477
C.O.V. for A = σ/ X1 bar * 100 = 14.477/ 50 * 100 = 28.955%
Similarly, σ for B = √∑( X2-X2 bar)2 /n = √1236/10 = 11.117
C.O.V. for A = σ/ X2 bar * 100 = 11.117/ 62 * 100 = 17.93%
Since COV for student B is lower, hence student B is more consistent and should get the prize.

Q2. The weekly sales of two products A and B were recorded as given below:
A: 59 75 27 63 27 28 57
B: 150 200 125 310 330 250 224
Find (using coefficient of variation) which of the two shows more fluctuation in sales?

Solution:
A(X1) B(X2) (X1-X1 bar)2 (X2-X2 bar)2
59 150 121 5929
75 200 729 729
27 125 441 10404
63 310 225 6889
27 330 441 10609
28 250 400 529
57 224 81 9
X1 bar = 336/7 = 48
X2 bar = 1589/7= 227
σ for A = √∑( X1-X1 bar)2 /n = √2438/7 = 18.66
C.O.V. for A = σ/ X1 bar * 100 = 18.66/ 48 * 100 = 38.88 %
Similarly, σ for B = √∑( X2-X2 bar)2 /n = √35098/7 = 70.8
C.O.V. for A = σ/ X2 bar * 100 = 70.8/ 227 * 100 = 31.19 %
Since COV for product A is higher, hence product A shows more fluctuation in sales.

Q3. Calculate Arithmetic mean and standard deviation and coefficient of variation of the
following distribution:
Class Interval Frequency
2000 – 3000 12
3000 – 4000 25
4000 - 5000 37
5000 – 6000 18
6000 – 7000 8
Total 100

Solution:
Class Interval Frequency M Fm (m- x bar)2 f(m- x bar)2
2000 – 3000 12 2500 30000 3422500 41070000
3000 – 4000 25 3500 87500 722500 18062500
4000 - 5000 37 4500 166500 22500 832500
5000 – 6000 18 5500 99000 1322500 23805000
6000 – 7000 8 6500 52000 4622500 36980000
Total 100 435000 120750000

X bar = ∑fm/∑f = 435000/100 = 4350

σ = √∑ f(m- x bar)2/ ∑f= √120750000/100 = 1098.86
COV = σ/ X bar * 100 = 1098.86/4350 * 100 = 25.26%

Q4. The following is the sample of duration of 10 randomly selected calls made by a person.
Find the mean and standard deviation.
Duration of calls (in minutes): 3.2 2.8 2.7 4.2 1.7 2.2 2.6 4.1 3.6 3.8
Solution: X bar = ∑X/n = 3.09= 3.1
(X – X bar)2
0.01
0.09
0.16
1.21
1.96
0.81
0.25
1
0.25
0.49
∑( X – X bar)2= 6.23
σ= √∑( X – X bar)2/n = √6.23/10 = 0.789

Q5. The following are the amount of time spent on the internet (minutes per day) collected from
a sample of 15 employees of an organization.
45 56 63 27 43
65 120 70 73 85
86 95 100 110 87

Find the following:

a) The average time spent on the internet.
b) The standard deviation of the time spent on the internet
Solution: Average time= ∑X/n = 1125/15= 75 minutes
(X – X bar)2
900
361
144
2304
1024
100
2025
25
4
100
121
400
625
1225
144

∑(X – X bar)2= 9502

σ= √∑( X – X bar)2/n = √9502/15 = 25.169

Unsolved questions (with answers)

Q6. The incomes of two people A and B (in Rs. ‘000) were recorded as given below:
A: 15 20 22 14 27 28 30
B: 15 18 12 26 33 25 30
Find using coefficient of variation which of the two shows more variation in income.

Answer ------- COV of A = 26.34%

COV of B=32.05%
Income of B shows more variation.

Q7. The marks of two people A and B were recorded as given below:
A: 5 10 12 14 20 28 30
B: 5 14 12 26 20 25 30
Find using coefficient of variation which of the two shows more variation in marks.

Answer ------- COV of A = 50.94%

COV of B=43.76%
Marks of A show more variation as COV for A is more.