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Measures of Variance

The Standard Deviation

Learning Objectives

Calculate and understand the sample and population standard deviations.

The Standard Deviation (St. Dev.):

  • Is the average distance that the numbers are away from the mean.
  • I.e., the average of (xix¯).
  • It takes into account ALL the numbers when calculating the ‘spread’ of the data.
  • Is a good measure of dispersion of data.

The SAMPLE standard deviation is defined as:

s=Σ(xix¯)2n1

The POPULATION standard deviation (indicated by σ, the LOWER case SIGMA) is given by:

σ=Σ(xiμ)2N

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An Introduction to Business Statistics for Analytics (1st Edition) Copyright © 2024 by Amy Goldlist; Charles Chan; Leslie Major; Michael Johnson is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.

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