ECON 233: ECONOMIC STATISTICS I Measures of Dispersion

Document Content and Description Below

What is Dispersion? Classification of Measures of Dispersion Calculating Variance: Divide by n - 1, where n is the number of data points • A long time ago, statisticians just divided by n when c... alculating the variance of the sample. This gives you the average value of the squared deviation, which is a perfect match for the variance of that sample. • But remember, a sample is just an estimate of a larger population. If you took another random sample and made the same calculation, you would get a different result. • As it turns out, dividing by n - 1 instead of n gives you a better estimate of variance of the larger population, which is what you're really interested in. 41 Calculating Variance • Note that, since there was an exponent in the formula, variance is measured in the squared unit of the original data. This can make it difficult to understand intuitively. Instead, it's often useful to use the standard deviation. You didn't waste your effort, though, as the standard deviation is defined as the square root of the variance. 42 Calculating Variance [Show More]

Last updated: 2 years ago

Preview 1 out of 50 pages

Buy Now

Instant download

We Accept: