TOPIC THREE: MEASURES OF DISPERSION

3.1 Introduction
Dispersion refers to the degree to which numerical data tends to spread
about an average value. It is the extent of the scatteredness of items
around a measure of central tendency. The measures of dispersion are
also referred to as measures of variation or measures of spread.

3.2 Significance of measuring dispersion

a) To determine the reliability of an average
b) To serve as a basis for the control of the variability
c) To compare two or more series with regard to their variability
d) To facilitate the use of other statistical measures
3.3 Properties of a good measure of dispersion
It should be: -
a) Simple to understand
b) Easy to compute
c) Rigidly defined
d) Based on each and every item in the distribution
e) Amenable to further algebraic calculations
f) Have sampling stability
g) Not be unduly affected by extreme values
NOTE: The measures of dispersion which are expressed in terms of the
original units of the observations are termed as absolute measures. Such
measures are not suitable for comparing the variability of two
distributions which are not expressed in the same units of measurements.
Therefore, it is better to use relative measure of dispersion obtained as
ratios or percentages and are thus pure numbers independent of the unit
of measurement.

3.4 Measures of dispersion

a) Range
b) Quartile, Decile and Percentile

c) Interquartile Range and Quartile Deviation

d) Mean deviation
 e) Variance

f) Standard Deviation

g) Coefficient of Variance

‘
3.4.1 The Range

It is the difference between the smallest value and the largest value of a
series
Example
The following are the prices of shares of a company from Monday to
Saturday.
Day Monday Tuesday Wednesd Thursda Friday Saturda
ay y y
Price 200 210 208 160 220 250

Calculate the range.

Solution: Range = L – S
 = 250 – 160 = 90
NB:
In case of grouped frequency distribution, the range is the difference
between the upper-class boundary of the largest class and the lower-
class boundary of the smallest class.

Advantages of the Range

a) It is the simplest to understand and compute
b) It takes the minimum time to calculate the value of the range

Limitations
a) It is not based on each and every value of the distribution
b) It is subject to fluctuations of considerable magnitude from sample to
sample
c) It cannot be computed in case of open-ended distributions
d) It does not explain or indicate anything about the character of the
distribution within the two extreme observations.

Uses of the range

a) Quality control
b) Fluctuations of prices
c) Weather forecast
d) Finding the difference between two values e.g. wages earned by
different employees.

3.4.2 The Interquartile Range and Quartile Deviation

Interquartile range: it’s the difference between the third quartile and
the first quartile
i.e. Interquartile range = Q3 – Q1
Quartile Deviation: also called the semi-interquartile range. It’s
obtained by dividing the interquartile range by 2.
i.e. Q.D = where Q.D = Quartile Deviation

3.4.3 The Mean Deviation

It is the average amount of scatter of the items in the distribution from

the mean, median or mode, ignoring the signs of deviation. If

are n observations then the mean deviation about the mean is calculated
as;

For ungrouped data:

For grouped data:

Examples
1. Calculate the mean deviation of the following values
3000, 4000, 4200, 4400, 4600, 4800, 5800

2. Calculate the average deviation from the mean for the following
Sales 10 – 20 20 – 30 – 40 40 – 50 –
(thousands) 30 50 60
No. of days 3 6 11 3 2
(f)

Merits of Mean Deviation

a) It is easy to compute and understand
b) It uses all the data
c) It is less affected by the extreme values
d) Since deviations are taken from a central value, comparison about
formation of different distributions can easily be made.
e) It shows the significance of an average in the distribution
Demerits
a) Ignores algebraic signs while taking the deviations
b) Cannot be computed for distributions with open-ended class
c) Rarely used in sociological studies

3.4.4 The Variance and Standard Deviation

The variance of a set of observations is the average squared deviations of

the data points from their mean. Variance is the mean square deviation.

It is denoted by for sample data and for population data.

Standard deviation is the square root of the variance. It is denoted by s

for sample data and for population data.

Computing the Variance

 Variance for ungrouped data

, where = sum of squares of the deviations from

arithmetic mean
 Variance for grouped data

Computing the standard deviation

Standard deviation for ungrouped data

Standard deviation for grouped data

NB: The computations of can be simplified by using the following
version of the formula

For ungrouped data:

For grouped data:

Examples
1. Find the standard deviation of the wages of the following ten workers
working in a factory
Worker A B C D E F G H I J
Weekly 132 131 131 132 132 134 132 132 132 133
Sales 0 0 5 2 6 0 5 1 0 1

2. An analysis of production rejects resulted in the following figures:

No. of rejects 21 - 26 - 31 - 36 - 41 - 45 45 - 50 51 - 55
per operator 25 30 35 40
No of operators 5 15 28 42 15 12 3
(f)
Calculate the mean and standard deviation

Combined standard deviation

Combined arithmetic mean for two sets of data with arithmetic means

x 1 , x 2 and the number of observations n1 n2 is given by

Combined standard deviation of two series is given by

where = Combined standard deviation

= standard deviation of the first group

= standard deviation of the second group

;
NB: The above formula can be extended to find out the standard
deviation of three or more groups. For example, combined standard
deviation of three groups would be

Where ; ;
Example
1. The number of workers employed, the mean wage per week and the
standard deviation in each branch of a company are given below.
Calculate the mean wages and standard deviation of all workers taken
together for the factory.
Branch No. of workers Weekly mean Standard
wage deviation
A 50 1413 60
B 60 1420 70
C 90 1415 80

Advantages of the standard deviation

a) It is rigidly defined and is based on all the observations of the series
b) It is applied or used in other statistical techniques like correlation
and regression analysis and sampling theory.
c) It is possible to calculate the combined standard deviation of two or
more groups.

Disadvantages of the standard deviation

a) It cannot be used for comparing the dispersion of two or more series
of observations given in different units.
 b) It gives more weight to extreme values.

Coefficient of Variation
The measures of dispersion which are expressed in terms of the original
units of the observations are termed as absolute measures. Such
measures are not suitable for comparing the variability of two
distributions which are not expressed in the same units of measurements.
Therefore, it is better to use relative measure of dispersion obtained as
ratios or percentages and are thus pure numbers independent of the unit
of measurement.

Standard deviation is an absolute measure of dispersion and a relative

measure based on the standard deviation is called the coefficient of
variation. It is a pure number and suitable for comparing the variability,
homogeneity or uniformity of two or more distributions. It is given as a
percentage and calculated as

Coefficient of variation (CV) =

The lower the C.V the more consistent or stable the distribution is since
the less the variability.

Example
Over a period of 3 months the daily number of components produced by
two comparable machines was measured, giving the following statistics
Machine A: mean = 242.8; Standard deviation = 20.5
Machine B: mean = 281.3; Standard deviation = 23.0
Which machine has less variability in its performance?
3.5 Skewness and Kurtosis
The term ‘skewness’ refers to lack of symmetry or departure from
symmetry. When a distribution is not symmetrical it is called a skewed
distribution.
In a symmetrical distribution the values of mean, median and mode are
alike. If the value of mean is greater than the mode, skewness is said to
be positive. If the value of mode is greater than mean, skewness is said to
be negative.
The Karl Pearson’s coefficient of skewness is frequently used for
measuring skewness and its calculated as

But . Thus the formula for calculating the

coefficient of skewness can be written as
Kurtosis refers to the degree of flatness or peakedness of a frequency
curve. The degree of peakedness of a distribution is measured relative to
the peakedness of the normal distribution.

If a distribution is more peaked than the normal curve, it is called

Leptokurtic; if it is more flat-topped than the normal curve, it is called
platykurtic or flat-topped. The normal curve is itself known as
Mesokurtic.
Freq

Leptokurtic curve

Mesokurtic (normal curve)

Platykurtic curve

3.6 Activities

1. The following table indicates the marks obtained by students in a

statistics test.
Marks Number of
students
0 – 20 5
20 – 40 7
40 – 60 -
60 – 80 8
80 – 100 7
The arithmetic mean for the class was 52.5 marks. You are required to
determine the value of:
i) The missing frequency
ii) The median mark
iii) The modal mark
iv) The standard deviation
v) The coefficient of skewness
2. From the prices of the shares X and Y given below, state which share
is more stable in value and which one would you invest on and why?
X: 55 54 52 53 56 58 52 50 51 49
Y: 108 107 105 105 106 107 104 103 10 101
4

3. An analysis of the monthly wages paid to workers of two firms A and B

belonging to the same industry gives the following results:
Firm A Firm B
No. of wage earners 586 648
Average monthly 52.5 47.5
wage 10 11
Standard deviation
Compute the combined standard deviation.