Context

Definition of variance
Formula for group and ungroup data
Example for group and ungroup data
Properties of variance
Merits and demerits of variance
 Definition of variance

Variance is the expectation of the squared deviation of

a random variable from its mean. Informally, it
measures how far a set of (random) numbers are spread
out from their average value.
 Formulas of variance

Formula for Ungrouped Data

Population σ = 2

 σ =population variance
2

∑ (X - µ) = The sum of (X - µ) for all data points

2 2

• X = individual data points

µ = mean of the population
N = number of data points
 Formulas of variance

Ungroup data
Sample
= sample variance
• ∑ (X - xx) = The sum of (X - xx) for all data points
2 2

X = individual data points

x̅=mean of the sample
n= number of data points
 Formulas of variance

Grouped Data
Population σ = 2

 σ =population variance
2

 ∑ ƒ (X - µ) = The sum of ƒ (X - µ)

2 2
for all data points
• X = individual data points

µ = mean of the population
∑ ƒ =sum of frequency
 Formulas of variance

Grouped Data
Sample =
= sample variance
∑ƒ (X - xx) = The sum of ƒ (X - xx) for all data points
2 2
• 
X = individual data points
x̅=mean of the sample
∑ƒ = sum of frequency
 Example of Ungrouped Data

• The marks of 5 students of a class is given to be 6,3,5,3,8 What is the

variance of the data set?
 Solution of Example
x

6 5 1 1

3 5 -2 4

5 5 0 0

3 5 -2 4  Variance=
8 5 3 9 Variance =
Variance = 3.6
∑x=25 18
 Example of Group Data

• Find the estimate of variance of the following data for the marks obtained in
a test by 15 students.
marks 10-12 13-15 16-18 19-21 22-24

frequency 5 6 7 8 4
 Solution of Example
x(scores) f(freq) x(class ∑ f
mark)
10-12 5 11 55 17 -6 36 180

13-15 6 14 84 17 -3 9 54

16-18 7 17 119 17 0 0 0

19-21 8 20 160 17 3 9 72

22-24 4 23 92 17 6 36 144
 
∑ƒ=30 ∑fx=510 =450 Variance = 
Variance = 
Variance = 15
 PROPERTIES OF VARIANCE

Statistical variance does have the following properties:

 The value of variance is always positive. It cannot be negative.
 Zero variance indicates that all the values are equal in the distribution.
 PROPERTIES OF VARIANCE

 If all the values of a variable in a distribution are multiplied by constant,

then the variance of distribution is multiplied by the square of that constant.
If in a frequency distribution, all values are added by constant number, then
the variance of the distribution does not change, i.e.
var (x) = var (x + a)
 Merits and Demerits of Using Variance

Statisticians use variance to see how individual numbers relate to each other within
a data set, rather than using broader mathematical techniques such as arranging
numbers into quartiles. A drawback to variance is that it gives added weight to
numbers far from the mean (outliers), since squaring these numbers can skew
interpretations of the data. The advantage of variance is that it treats all deviations
from the mean the same regardless of direction; as a result, the squared deviations
cannot sum to zero and give the appearance of no variability at all in the data. The
drawback of variance is that it is not easily interpreted, and the square root of its
value is usually taken to get the standard deviation of the data set in question.