G N V H S – S H S Learning Resource Material in Probability and Statistics

Lesson 4: Variance of a Discrete Probability Distribution

The variance and standard deviation describe the amount of spread, dispersion, or variability of the items in
a distribution

STEPS IN COMPUTING THE VARIANCE AND STANDARD DEVIATION OF A DISCRETE PROBABILITY DISTRIBUTION

1. Find the mean of the probability distribution.

2. Subtract the mean from each value of the random variable X.

3. Square the results obtained in Step 2.

4. Multiply the results obtained in Step 3 by the corresponding probability.

5. Get the sum of the results obtained in Step 4.

EXAMPLE 8

NUMBER OF CARS SOLD

1 2 3 2 2
The probabilities that 0, 1, 2, 3, or 4 number of cars sold by a local car dealership are 10, 10, 10, 10, and 10
,
respectively. Calculate the variance and standard deviation of the probability distribution.

Solution:

STEPS SOLUTION
1. Find the mean of the probability
distribution using the formula Number of Cars Sold Probability
X ● P(X)
μ = Σ X●P(X) X P(X)
1
0 0
10
2 2
1
10 10
3 6
2
10 10
2 6
3
10 10
2 8
4
10 10
22
μ = ΣX●P(X) = = 2.2
10

1
G N V H S – S H S Learning Resource Material in Probability and Statistics

2. Subtract the mean from each

value of random variable X Number of Cars
Probability
Sold X ● P(X) X-μ
P(X)
X
1
0 0 0 – 2.2 = -2.2
10
2 2
1 1 – 2.2 = -1.2
10 10
3 6
2 2 – 2.2 = -0.2
10 10
2 6
3 3 – 2.2 = 0.8
10 10
2 8
4 4 – 2.2 = 1.8
10 10
3. Square the results obtained in
Step 2. X P(X) X ● P(X) X-μ (X – μ)2
1
0 0 -2.2 4.84
10
2 2
1 -1.2 1.44
10 10
3 6
2 -0.2 0.04
10 10
2 6
3 0.8 0.64
10 10
2 8
4 1.8 3.24
10 10

4. Multiply the results obtained in

Step 3 by the corresponding X P(X) X ● P(X) X-μ (X – μ)2 (X – μ)2 ● P(X)
probability. 1
0 0 -2.2 4.84 0.484
10
2 2
1 -1.2 1.44 0.288
10 10
3 6
2 -0.2 0.04 0.012
10 10
2 6
3 0.8 0.64 0.128
10 10
2 8
4 1.8 3.24 0.648
10 10

2
G N V H S – S H S Learning Resource Material in Probability and Statistics

5. Get the sum of the results

obtained in Step 4. The result is the X P(X) X ● P(X) X-μ (X – μ)2 (X – μ)2 ● P(X)
value of variance. So, the formula for 1
the variance is:
0 0 -2.2 4.84 0.484
10
σ2 = Σ (X – μ)2 ● P(X) 2 2
1 -1.2 1.44 0.288
10 10
3 6
2 -0.2 0.04 0.012
10 10
2 6
3 0.8 0.64 0.128
10 10
2 8
4 1.8 3.24 0.648
10 10
σ2 = Σ (X – μ)2 ● P(X) = 1.56

6. Get the square root of the The variance of the probability distribution is 1.56.
variance to get the standard The standard deviation is σ = √1.56 = 1.25
deviation.

Formula for the Variance and Standard Deviation of a Discrete Probability Distribution
The variance of a discrete probability distribution is given by:
σ2 = Σ (X – μ)2 ● P(X)
The standard deviation of a discrete probability distribution is given by:

σ = √Σ (X – μ)2 ● P(X)
where:
μ mean pf probability distribution
X values of the random variable
P(X) probability of random variable X

Note: Capital Greek letter Sigma (Σ) denotes summation.

ALTERNATIVE PROCEDURE IN FINDING THE VARIANCE AND STANDARD DEVIATION OF A DISCRETE PROBABILITY
DISTRIBUTION

1. Find the mean of the probability distribution.

2. Multiply the square of the value of the random variable X by its corresponding probability.
3. Get the sum of the results obtained in Step 2.
4. Subtract the square of the mean from the results obtained in Step 3.
5. Get the sum of the results obtained in Step 4.
Solution: (Numbers of Cars Sold)

3
G N V H S – S H S Learning Resource Material in Probability and Statistics

STEPS SOLUTION
1. Find the mean of the probability
distribution using the formula Number of Cars Sold Probability
X ● P(X)
μ = Σ X●P(X) X P(X)
1
0 0
10
2 2
1
10 10
3 6
2
10 10
2 6
3
10 10
2 8
4
10 10
22
μ = ΣX●P(X) = = 2.2
10

2. Multiply the square of the value of

the random variable X by its X P(X) X ● P(X) X2 ● P(X)
corresponding probability. 1 1
0 0 02 ● =0
10 10
2 2 2 2
1 12 ● 10 = 10
10 10
3 6 3 12
2 22 ● =
10 10 10 10
2 6 2 18
3 32 ● =
10 10 10 10
2 8 2 32
4 42 ● 10 = 10
10 10

3. Get the sum of the results

obtained in Step 2. X P(X) X ● P(X) X2 ● P(X)
1 1
0 0 02 ● 10 = 0
10
2 2 2 2
1 12 ● 10 = 10
10 10
3 6 3 12
2 22 ● 10 = 10
10 10
2 6 2 18
3 32 ● 10 = 10
10 10
2 8 2 32
4 42 ● 10 = 10
10 10
64
Σ(X2●P(X)) = = 6.4
10

4
G N V H S – S H S Learning Resource Material in Probability and Statistics

4. Subtract the square of the mean The variance is

from the results obtained in Step 3 σ2 = Σ(X2 ● P(X)) – μ2
to get the variance. So, the formula = 6.4 – (2.2)2
for the variance of probability = 1.56
distribution is
σ2 = Σ(X2 ● P(X)) – μ2

The standard deviation is the The standard deviation is

square root of the variance. Thus,
σ = √1.56
σ = √Σ(X 2 ● P(X)) – μ2 = 1.25

Alternative Formula for the Variance and Standard Deviation of a Discrete Probability
Distribution
The variance of a discrete probability distribution is given by:
σ2 = Σ(X2 ●P(X)) - μ2
The standard deviation of a discrete probability distribution is given by:

σ = √Σ(X 2 ● P(X)) − μ2

where:
μ mean pf probability distribution
X values of the random variable
P(X) probability of random variable X
Note: Capital Greek letter Sigma (Σ) denotes summation.