Business Statistics For Dummies, 2nd Edition

Chapter 4

Measuring Variation in a Data Set

IN THIS CHAPTER

Computing variance and standard deviation

Finding the relative position of data: percentiles and quartiles

Measuring relative variation: the coefficient of variation

One of the most important properties of a data set (a sample or population) is how “spread out” the data are from the center. (Techniques for measuring the center of a data set are covered in Chapter 3.) You can use several numerical measures, known as measures of dispersion, to calculate the spread of a data set.

This chapter covers the techniques used to compute the variance and standard deviation of a sample and a population. (Samples and populations are defined in Chapter 1.) Techniques for determining the relative position of an element within a sample or a population are also explained in detail; these include percentiles and quartiles. Finally, the coefficient of variation is introduced as a measure of relative variation; this enables a direct comparison of the properties of two samples or two populations.

Thanks to the standard deviation and the mean (covered in Chapter 3), you can calculate relative variation, which has many handy applications.