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E
=
n
X X
S
VARIANCE
Working formula for population variance is:
Working formula for sample variance is:
2
2
2
) (
N
X
N
X E
E
= o
1
) (
S
2
2
2
E
E
=
n
n
X
X
RELATIVE DISPERSION
The usual measure of dispersion cannot be
used to compare the dispersion if the units
are different, even the unit are same but the
means are different.
It reports variation relative to the mean.
It is useful for comparing distributions with
different units.
Hear we only discuses:
1. Coefficient of Variation
COEFFICIENT OF VARIANCE
The CV is the ratio of the standard
deviation to the arithmetic mean,
expressed as a percentage. We can also
said, to compare the variations (dispersion)
of two different series, relative measures of
standard deviation must be calculated.
This is known as co-efficient of variation.
The formula of CV is given bellow:
100 =
X
s
CV
Class Interval Frequency X/Midpoint xf -- -- --
f
00-04
05-09
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
14.46
16.53
15.70
12.18
10.68
9.85
9.36
8.19
7.13
5.15
4.32
2.77
2.66
1.75
1.46
2
7
12
17
22
27
32
37
42
47
52
57
62
67
72
28.92
115.78
188.4
207.06
234.96
265.95
299.52
303.03
299.46
242.05
224.64
157.89
164.92
117.25
105.12
-22.18
-17.18
-12.18
-7.18
-2.18
2.82
7.82
12.82
17.82
22.82
27.82
32.82
37.82
42.82
47.82
22.18
17.18
12.18
7.18
2.18
2.82
7.82
12.82
17.82
22.82
27.82
32.82
37.82
42.82
47.82
320.72
283.98
191.22
87.45
23.68
27.77
73.19
104.99
127.05
117.52
120.18
90.91
100.60
74.93
69.81
491.95
295.15
148.35
51.55
4.75
7.95
61.15
164.35
317.55
520.75
773.95
1077.15
1430.35
1833.55
2286.75
7113.59
4878.82
2329.09
627.87
50.73
78.30
572.364
1346.02
2264.13
2681.86
3343.46
2983.70
3804.73
3208.71
3338.65
122.19 2954.95 1814 38700.32
X X | | X X
| | X X
( )
2
X X
( )
2
X X f
Range= 74-0 = 74
_
X= 2954.95/122.19= 24.18
_
Mean Deviation= = 1814/122.19=14.8457
f
| | f
E
E X X
EXAMPLE
Determination of the year 2011:
Figure in Mil
Variance, =38700.32/122.19= 316.72
Standard Deviation=
= 17.7966
Coefficient of Variance (CV)=
= (17.7966/24)X100
= 74.15%
( )
f
X X
S
E
E
=
2
|
|
.
|
\
|
E
= =
1
) (
2
2
n
X X
S S
100 =
X
s
CV
|
.
|
\
|
=
122.19
38700.32
CORRELATION
Helps to take decision and identifying the nature of business
and economic decisions
Helpful in identifying the nature of relationship among many
business and economic variables
One variable depends on another and can be determined by it
The Coefficient of Correlation (r) is a measure of the strength of
the relationship between two variables.
It requires interval or ratio-scaled data (variables).
It can range from -1.00 to 1.00.
Values of -1.00 or 1.00 indicate perfect and strong correlation.
Values close to 0.0 indicate no linear correlation.
Negative values indicate an inverse relationship and positive
values indicate a direct relationship
DATA TABLE
X Y
X- X^ Y-Y^ (X-X^)(Y-Y^) (X-X^)
2
(Y-Y^)
2
3 41
-2 -14 28 4 196
7 76
2 21 42 4 441
6 56
1 1 1 1 1
5 78
0 23 0 0 529
2 43
-3 -12 36 9 144
1 34
-4 -21 84 16 441
X^ = 5 Y^ = 55
(X-X^)(Y-Y^)
=191
X-X^)
2
= 34 (Y-Y^)
2
= 1752
VALUE OF R
r = 0.78
Comment: As, the value or r is positive , so
the variables have stronger relation between
them.
REGRESSION
A regression is a statistical analysis assessing the association
between two variables. It is used to find the relationship
between two variables.
General form of linear regression model
Y = a + bX + e
Where,
Y : dependent variable
a : intercept term
b : slope of the line
X : independent variable
e : error term
Want to estimate a and b such that e
2
is minimum
REGRESSION ANALYSIS
X Y
X- Y- (X- )(Y- ) (X- )
2
3 41
-2 -14 28 4
7 76 2 21 42 4
6 56 1 1 1 1
5 78
0 23 0 0
2 43
-3 -12 36 9
1 34
-4 -21 84 16
= 5 = 55
(X- )(Y- )
=191
(X- )2
= 34
REGRESSION ANALYSIS
So,
Here after putting the value,
= 191/34 = 5.6
a = 55 - 5.6(5) =27
Form the linear regression model, Y = 27 + 5.6X
Here regression coefficient is 5.6 that means if we change 1 unit of
independent variable, dependent variable will change 5.6.
THANK YOU