The sample having the greatest coefficient of variation

coefficient of variation has the most widely dispersed data.

The ratio, expressed as a For the apartment rent data set, the coefficient of
percentage, of a variable’s
variation is
standard deviation to its
arithmetic mean. $84.71
CV = × 100 = 10.38%
range $815.83
In statistics, the difference be-
tween the highest and lowest Range
values in a set of numbers. The range is a simple measure of the spread of the data.
It is the difference between the values of the largest
observation and the smallest observation. When data is
normally distributed, the range will be approximately
equal to 6 standard deviations. The range for the apartment rent data is
$600 – $995, or $395. This range equates to 4.66 standard deviations, i.e.,
less dispersion than would be expected for a normally distributed data set.

Interquartile Range
A data set’s ordered array can be divided into four subsets of identical
size by identifying quartiles. Quartiles are useful for analyzing the shape
of the data distribution, which will be illustrated in the next section of
this chapter.
Quartile 1 (Q1) ends at the midpoint between the lowest value and
the median. Quartile 2 (Q2) ends at the median, and Quartile 3 (Q3)
ends at the midpoint between the highest value and the median.
The following decision rules also apply:
1. If the position point calculation is an integer, then the ordered ob-
servation occupying that position point is the quartile boundary.
2. If the position point is halfway between two integers, then the mid-
point between the next-largest and next-smallest ordered observa-
tion is the quartile boundary.

Measure Calculation
interquartile range
A measure of dispersion. The interquartile range indicates the “dis- Quartile 1 (Q1)
tance” between the value dividing the first and second quartile from n+1
the value dividing the third and fourth quartile. Q1 =
4
ordered observation
Quartile 2 (Q2)
Q2 = median
Quartile 3 (Q3)
3(n + 1)
Q3 =
4
ordered observation
Note that Excel calculates quartiles in
a different manner.

286 The Appraisal of Real Estate