6 Descriptive Statistics 2

Department of Economics
Sunando
Basic StatisticsBasu
Assistant Professor
Faculty of Behavioural & Social Sciences
Measures of Dispersion
Range
Quartiles
Variance
Standard Deviation
Coefficient of Variation
Definitions
 Measures of variation give information on the
spread or variability or dispersion of the data
values.
 The measure of central tendency is a

representative value that the data values
group around.
 The measure of skewness is how symmetrical

(or not) the distribution of data values.
Measures of Dispersion: Range
 Simplest measure of dispersion

 Difference between the largest and the smallest values:
Range = Xlargest – Xsmallest
Example: 24, 12, 18, 80, 15, 28, 30, 25; Range = 80-12 = 68
Quartile Measures
 Quartiles split the ranked data into 4 portions with an equal
number of values per portion
25% 25% 25% 25%
Q1 Q2 Q3
 The first quartile, Q1, is the value for which 25% of the observations
are smaller and 75% are larger
 Q2 is the same as the median (50% of the observations are smaller
and 50% are larger)
 Only 25% of the observations are greater than the third quartile
Quartile Measures:
Find a quartile by determining the value in the appropriate

position in the ranked data, where
First quartile position: Q1 = (n+1)/4 ranked value
Second quartile position: Q2 = (n+1)/2 ranked value
Third quartile position: Q3 = 3(n+1)/4 ranked value
number of observed values

Quartile Measures:
When calculating the ranked position use the

following rules
◦ If the result is a whole number then it is the ranked

position to use
◦ If the result is a fraction then average the two

corresponding data values.
◦ If the result is not a whole number or a fraction then

round the result to the nearest integer to find the
ranked position.
Quartile Measures: The Interquartile Range
(IQR)
 TheIQR is Q3 – Q1 and measures the spread in

the middle 50% of the data
 The IQR is a measure of variability that is not
influenced by outliers or extreme values
For A Population: Variance σ2
Average of squared deviations of values from
the mean
N
◦ Population variance:  (X i  μ) 2
σ2  i 1
N
Where μ = population mean

N = population size
Xi = ith value of the variable X
Standard Deviation from a Frequency Distribution
 Allvalues within each class interval are located at the midpoint of

the class
s
 ( x  x ) 2
f
n -1
Where n = number of values or sample size

x = midpoint of the jth class
f = number of values in the jth class
Summary
Range X largest – X smallest Total Spread

Standard Deviation 2 Dispersion about
(Sample)  X i
 X 
Sample Mean
n  1
Standard Deviation 2 Dispersion about
(Population)
 X i
  X

Population Mean
N
2
Variance  ( X i  X ) Squared Dispersion
(Sample) n –1 about Sample Mean
Steps for Calculating Standard Deviation
 Calculate the difference between each value and the
mean.
 Square all difference.
 Add the squared differences.
 Divide the total by (n-1) to get the sample variance.
 Take square root of the sample variance to get the
sample standard deviation.
Example: Standard Deviation.
600, 470, 170, 430, 300
Mean x( ) = (600 + 470 + 170 + 430 +
300)/5 =394
Variance (σ2)= [2062 + 762 + (−224)2 + 362 +
(−94)2 ]/5 =21704
Standard Deviation (σ) =√21704 =147.32
13
Comparing Standard Deviations
Smaller standard deviation
Larger standard deviation

Summary
 The more the data are spread out, the greater the range,
variance, and standard deviation.
 The less the data are spread out, the smaller the range, variance,
and standard deviation.
 If the values are all the same, all these measures will be zero.
 All of these measures are non-negative.

The Coefficient of Variation
Shows variation relative to mean in percentage

(%)
Compare the variability of two or more sets of
data measured in different units
 S 
CV  
 X 
 
The Coefficient of Variation
 Coefficient of Variation of a population:
 
CV  
  
 Thiscan be used to compare two distributions directly to see
which has more dispersion because it does not depend on units of
the distribution.
Coefficient of Variation of Wealth
Coefficient of variation
=

=229.957 / 131.443
= 1.749
The standard deviation is 1.75% of the mean.

Sample statistics versus population parameters
Measure Population Sample Statistic

Parameter
Mean
Variance
Standard Deviation
Chap
3-19
Pitfalls in Numerical
Descriptive Measures
Data analysis is objective

◦ Should report the summary measures that best
describe and communicate the important aspects of
the data set
Data interpretation is subjective

◦ Should be done in fair, neutral and clear manner
Chap
3-20

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Department of Economics

 The measure of central tendency is a

 The measure of skewness is how symmetrical

 Simplest measure of dispersion

Range = Xlargest – Xsmallest

25% 25% 25% 25%

Find a quartile by determining the value in the appropriate

Second quartile position: Q2 = (n+1)/2 ranked value

Third quartile position: Q3 = 3(n+1)/4 ranked value

number of observed values

When calculating the ranked position use the

◦ If the result is a whole number then it is the ranked

◦ If the result is a fraction then average the two

◦ If the result is not a whole number or a fraction then

 TheIQR is Q3 – Q1 and measures the spread in

Where μ = population mean

 Allvalues within each class interval are located at the midpoint of

Where n = number of values or sample size

Range X largest – X smallest Total Spread

Smaller standard deviation

Larger standard deviation

 All of these measures are non-negative.

Shows variation relative to mean in percentage

 Coefficient of Variation of a population:

The standard deviation is 1.75% of the mean.

Measure Population Sample Statistic

Data analysis is objective

Data interpretation is subjective

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