Search for a topic  SIGNUP LOGIN

SCIENCE

Business Mathematics and Statistics > Measures of Central Tendency and Dispersion > Measures of Dispersion

BANK

Measures of Central Tendency and Dispersion

Measures
COMMERCE of Dispersion
Suppose you are given a data series. Someone asks you to tell some interesting
NCERT
facts about this data series. How can you do so? You can say you can find the
SOLUTIONS
mean, the median or the mode of this data series and tell about its
distribution. But is it the only thing you can do? Are the central tendencies
the only way by which we can get to know about the concentration of the
observation? In this section, we will learn about another measure to know
more about the data. Here, we are going to know about the measure of
dispersion. Let’s start.

Suggested Videos

Measures of Central Tendency

Quartile
Deviation
and
Measures Coef cient Measure
of Central of Quartile of
Tendency Deviation Dispersion

 
Measures of Dispersion
As the name suggests, the measure of dispersion shows the scatterings of the
data. It tells the variation of the data from one another and gives a clear idea
about the distribution of the data. The measure of dispersion shows the
homogeneity or the heterogeneity of the distribution of the observations.

Suppose you have four datasets of the same size and the mean is also same,
say, m. In all the cases the sum of the observations will be the same. Here, the
measure of central tendency is not giving a clear and complete idea about the
distribution for the four given sets.

Can we get an idea about the distribution if we get to know about the
dispersion of the observations from one another within and between the
datasets? The main idea about the measure of dispersion is to get to know
how the data are spread. It shows how much the data vary from their average
value.

Characteristics of Measures of Dispersion

A measure of dispersion should be rigidly defined

It must be easy to calculate and understand

Not affected much by the fluctuations of observations

Based on all observations

Classification of Measures of Dispersion

The measure of dispersion is categorized as:

(i) An absolute measure of dispersion:

The measures which express the scattering of observation in terms of

distances i.e., range, quartile deviation.

The measure which expresses the variations in terms of the average of

deviations of observations like mean deviation and standard deviation.

(ii) A relative measure of dispersion:

We use a relative measure of dispersion for comparing distributions of two or

more data set and for unit free comparison. They are the coefficient of range,
the coefficient of mean deviation, the coefficient of quartile deviation, the
coefficient of variation, and the coefficient of standard deviation.

Range
A range is the most common and easily understandable measure of
dispersion. It is the difference between two extreme observations of the data
set. If X max and X min are the two extreme observations then

Range = X max – X min

Merits of Range

It is the simplest of the measure of dispersion

Easy to calculate

Easy to understand

Independent of change of origin

Demerits of Range

It is based on two extreme observations. Hence, get affected by

fluctuations

A range is not a reliable measure of dispersion

Dependent on change of scale

Quartile Deviation
The quartiles divide a data set into quarters. The first quartile, (Q1) is the
middle number between the smallest number and the median of the data.
The second quartile, (Q2) is the median of the data set. The third quartile,
(Q3) is the middle number between the median and the largest number.

Quartile deviation or semi-inter-quartile deviation is

Q = ½ × (Q3 – Q1)
Merits of Quartile Deviation

All the drawbacks of Range are overcome by quartile deviation

It uses half of the data

Independent of change of origin

The best measure of dispersion for open-end classification

Demerits of Quartile Deviation

It ignores 50% of the data

Dependent on change of scale

Not a reliable measure of dispersion

Mean Deviation
Mean deviation is the arithmetic mean of the absolute deviations of the
observations from a measure of central tendency. If x1, x2, … , xn are the set of
observation, then the mean deviation of x about the average A (mean,
median, or mode) is

Mean deviation from average A = ⁄n [∑i|xi – A|]

For a grouped frequency, it is calculated as:

Mean deviation from average A = ⁄N [∑i  fi |xi – A|], N = ∑fi

Here, xi and fi are respectively the mid value and the frequency of the ith class
interval.

Merits of Mean Deviation

 Based on all observations

It provides a minimum value when the deviations are taken from the
median

Independent of change of origin

Demerits of Mean Deviation

Not easily understandable

Its calculation is not easy and time-consuming

Dependent on the change of scale

Ignorance of negative sign creates artificiality and becomes useless for

further mathematical treatment

Standard Deviation
A standard deviation is the positive square root of the arithmetic mean of the
squares of the deviations of the given values from their arithmetic mean. It is
denoted by a Greek letter sigma, σ. It is also referred to as root mean square
deviation. The standard deviation is given as

σ = [(Σi (yi – ȳ) ⁄ n] ½ =  [(Σ i yi 2 ⁄ n) – ȳ 2] ½

For a grouped frequency distribution, it is

σ = [(Σi  fi (yi – ȳ) ⁄ N] ½ = [(Σi fi  yi 2 ⁄ n) – ȳ 2] ½

The square of the standard deviation is the variance. It is also a measure of
dispersion.
σ 2 = [(Σi (yi – ȳ ) / n] ½ =  [(Σi yi 2 ⁄ n) – ȳ 2]

For a grouped frequency distribution, it is

σ 2 = [(Σi  fi (yi – ȳ ) ⁄ N] ½ = [(Σ i fi  xi 2 ⁄ n) – ȳ 2].

If instead of a mean, we choose any other arbitrary number, say A, the

standard deviation becomes the root mean deviation.

Variance of the Combined Series

If σ1, σ2 are two standard deviations of two series of sizes n1 and n2 with
means ȳ1 and ȳ2. The variance of the two series of sizes n1 + n2 is:

σ 2 = (1/ n1 + n2) ÷ [n1 (σ1 2 + d1 2) + n2 (σ2 2 + d2 2)]

where, d1 = ȳ 1 − ȳ , d2 = ȳ 2 − ȳ , and ȳ  = (n1 ȳ 1 + n2 ȳ 2) ÷ ( n1 + n2).

Merits of Standard Deviation

Squaring the deviations overcomes the drawback of ignoring signs in

mean deviations

Suitable for further mathematical treatment

Least affected by the fluctuation of the observations

The standard deviation is zero if all the observations are constant

Independent of change of origin

Demerits of Standard Deviation

Not easy to calculate

 Difficult to understand for a layman

Dependent on the change of scale

Coefficient of Dispersion
Whenever we want to compare the variability of the two series which differ
widely in their averages. Also, when the unit of measurement is different. We
need to calculate the coefficients of dispersion along with the measure of
dispersion. The coefficients of dispersion (C.D.) based on different measures
of dispersion are

Based on Range = (X max – X min) ⁄ (X max + X min).

C.D. based on quartile deviation = (Q3 – Q1) ⁄ (Q3 + Q1).

Based on mean deviation = Mean deviation/average from which it is

calculated.

For Standard deviation = S.D. ⁄ Mean

Coefficient of Variation

100 times the coefficient of dispersion based on standard deviation is the

coefficient of variation (C.V.).

C.V. = 100 × (S.D. / Mean) = (σ/ȳ ) × 100.

Solved Example on Measures of Dispersion

Problem: Below is the table showing the values of the results for two
companies A, and B.
 1. Which of the company has a larger wage bill?

2. Calculate the coefficients of variations for both of the companies.

3. Calculate the average daily wage and the variance of the distribution of
wages of all the employees in the firms A and B taken together.
Solution:

For Company A

No. of employees = n1 = 900, and average daily wages = ȳ 1  = Rs. 250

We know, average daily wage = Total wages ⁄ Total number of employees

or, Total wages = Total employees × average daily wage = 900 × 250 = Rs.
225000 … (i)

For Company B

No. of employees = n2 = 1000, and average daily wages = ȳ2 = Rs. 220

So, Total wages = Total employees × average daily wage = 1000 × 220 = Rs.
220000 … (ii)

Comparing (i), and (ii), we see that Company A has a larger wage bill.

For Company A
Variance of distribution of wages = σ12 = 100

C.V. of distribution of wages  = 100 x standard deviation of distribution of

wages/ average daily wages

Or, C.V. A = 100 × √⁄ = 100 × ⁄ = 4 … (i)

For Company B

Variance of distribution of wages = σ22 = 144

C.V. B = 100 × √⁄ = 100 × ⁄ = 5.45 … (ii)

Comparing (i), and (ii), we see that Company B has greater variability.

For Company A and B, taken together

The average daily wages for both the companies taken together

ȳ  = (n1 ȳ 1 + n2 ȳ 2)⁄( n1 + n2) = (900 × 250 + 1000 × 220) ÷ (900 + 1000) =
⁄ = Rs. 234.21

The combined variance, σ2 = (1/ n1 + n2) ÷ [n1 (σ1 2 + d1 2) + n2 (σ2 2 + d2 2)]

Here, d1 = ȳ1 − ȳ  = 250 – 234.21 = 15.79, d2 = ȳ2 −  ȳ  = 220 – 234.21 = –

14.21.

Hence, σ2 = [900 × (100 + 15.792) + 1000 × (144 + – 14.212)] ⁄ (900 + 1000)

or, σ2 = (314391.69 + 345924.10) ⁄ 1900 = 347.53.

Share with friends

Previous Next
Harmonic Mean and Geometric Mean Words

Customize your course in 30 seconds

Which class are you in?

5 th 6 th 7 th 8 th

9 th 10 th 11 th 12 th

GET STARTED

BROWSE
Measures of Central Tendency and Dispersion

Standard Deviation, Coefficient of Variation Range and Mean Deviation

Measures of Dispersion Harmonic Mean and Geometric Mean

Quartiles, Quartile Deviation and Coefficient of Quartile Deviation

Partition Values or Fractiles

 1
Leave a Reply

Join the discussion...

 0 0     1

1

  Subscribe    newest  oldest  most voted

Sapna  

I am CA student
Guest

 -2     Reply  2 months ago

BROWSE
Measures of Central Tendency and Dispersion

Standard Deviation, Coefficient of Variation

Range and Mean Deviation

Measures of Dispersion

Harmonic Mean and Geometric Mean

Quartiles, Quartile Deviation and Coefficient of Quartile Deviation

Partition Values or Fractiles

Stuck with a
 Question Mark?

Have a doubt at 3 am? Our experts are

available 24x7. Connect with a tutor
instantly and get your concepts
cleared in less than 3 steps.

REGISTER NOW

Download the App

Watch lectures, practise questions and take tests on the go.

Google Play App Store

Download Previous Years QUESTION PAPERS

Quick TIPS AND TRICKS for Successful Exam Preparation

Download NCERT Notes and Solutions

Learn from VIDEO lectures

CLASSES BOARDS EXAMS

CLASS 5 CBSE MADHYA PRADESH JEE MAIN NEET NTSE

CLASS 6 ICSE MAHARASHTRA JEE ADVANCED AIIMS NSO

CLASS 7 IGCSE PUNJAB UPSEE AFMC NSTSE

CLASS 8 ANDHRA PRADESH RAJASTHAN BITSAT AP EAMCET KVPY

CLASS 9 BIHAR TAMIL NADU TS EAMCET COMEDK HBBVS

CLASS 10 GUJARAT TELANGANA WBJEE JIPMER IMO

CLASS 11 JHARKHAND UTTAR PRADESH VITEEE BCECE IEO

CLASS 12 KARNATAKA MHT-CET KCET IJSO

CLASS 12+ KERALA SAT KEAM NDA

About Us • Press • Customer Stories • Jobs • Educators • Blog • Bytes •

Contact Us • FAQs

Terms Of Service • Privacy Policy