Measures of Dispersion
Measures of Dispersion
Measures of Dispersion
MEASURES OF DISPERSION
What Is Dispersion?
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Measures of Dispersion
The following are some of the important and widely used methods of
measuring dispersion:
▪ Range
▪ Interquartile range and quartile deviation
▪ Mean deviation or average deviation
▪ Standard deviation
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Range
Example 4.1: Find out the range and its coefficient from the following series.
110, 117, 129, 300, 357, 100, 500, 630, 750
Range can be computed by subtracting the lowest value of the series from
the highest value of the series as shown below:
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▪ Interquartile range is the difference between the third quartile and the first
quartile.
▪ Quartile deviation or semi-interquartile range can be obtained by dividing the
interquartile range by 2.
▪ Quartile deviation is an absolute measure of dispersion. Relative measure is
called the coefficient of quartile deviation. Coefficient of quartile deviation
can be used to measure the degree of variation in two different distributions
when both have different units of measurement.
Figure 4.5: Range, first quartile, median, third quartile, and interquartile range
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Standard Deviation
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Coefficient of Variation
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Coefficient of Variation
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Example 4.7: Find the standard deviation and variance for the
data given in Example 4.1.
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Example
• First Set
• n1=100
• Sd=5
• Mean=50
• Second Set
• n2=150
• Sd=6
• Mean=40
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Empirical Rule
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Chebyshev’s Theorem
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Measures of Shape
Measures of shape are the tools used for describing the shape of a
distribution of the data. There are two measures of shape: skewness and
kurtosis.
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Shape
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Symptoms of Skewness
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Coefficient of Skewness
▪ Karl Pearson developed a method for measuring skewness, referred
to as the Pearsonian coefficient of skewness. This coefficient compares mean and mode
and is divided by standard deviation. Pearsonian coefficient of skewness is given as:
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Kurtosis
• Kurtosis refers to the relative length of the tails and the degree of
concentration in the center.
• A normal bell-shaped population is called mesokurtic and serves as a
benchmark.
• A population that is flatter than a normal population (i.e., has heavier tails)
is called platykurtic, while one that is more sharply peaked than a normal
population (i.e., has thinner tails) is leptokurtic.
• Kurtosis is not the same thing as variability, although the two are easily
confused.
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Kurtosis
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Kurtosis
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▪In a right-skewed distribution, the distance from the third quartile to the
largest value is greater than the distance from the smallest value to the first
quartile.
▪In a left-skewed distribution, the distance from the median to the largest value
is less than the distance from the smallest value to the median.
▪In a left-skewed distribution, the distance from the third quartile to the largest
value is less than the distance from the smallest value to the first quartile.
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Measures of Association
▪ Measures of association are statistics for measuring the strength of
relationship between two variables.
▪ Correlation measures the degree of association between two variables.
▪ Karl Pearson’s coefficient of correlation is a quantitative measure of the
degree of relationship between two variables. Suppose these variables
are x and y, then Karl Pearson’s coefficient of correlation is defined as
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Covariance
The covariance of two random variables X and Y (denoted σXY )
measures the degree to which the values of X and Y change
together.
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Covariance
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Correlation
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Note: -1 ≤ r ≤ +1.
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Correlation Coefficient
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Example 4.9: Table 4.7 shows the sales revenue and advertisement expenses of a company
for the past 10 months. Find the coefficient of correlation between sales and
advertisement.
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Using MS Excel, Minitab and SPSS for the Computation of range, interquartile range,
standard deviation, variance, and coefficient of variation (An explanation through
Example 4.16)
Table 4.17 shows the sales (in million rupees) of four leading cement companies: Ambuja,
L&T, Madras Cement, and ACC from 1994–1995 to 2006–2007. Find range, interquartile
range, standard deviation, variance, and coefficient of variation from the sales data of
different companies.
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