Applying Analytics

44 Applying Analytics: A Practical Introduction

discussed in the next section, is an improvement on the variance for this

reason. For what it’s worth, let’s go through a simple interpretation of the

variance. From Equations 3.6 and 3.7, you can see that the further an element

is from the mean, the more it adds to the variance. This ha ppens regardless

of whether the element is larger or smaller than µ, beca us e the differe nce is

squared so any difference will add to s. For this reason, data sets that have

larger s tend to be more spread out from the mean. Dividing by n (or n − 1)

normalizes s so that data sets that have mo re elements don’t necessarily ...