Standard Deviation and Variance Explained
Standard deviation (σ or s) is the most widely used measure of data dispersion — it tells you how far, on average, individual values lie from the mean. A small standard deviation means values cluster tightly around the mean; a large one means they are spread out.
Step-by-Step Calculation
- Calculate the mean: x̄ = Σxᵢ / n
- Compute each squared deviation: (xᵢ − x̄)²
- Population variance: σ² = Σ(xᵢ − x̄)² / n
- Sample variance: s² = Σ(xᵢ − x̄)² / (n−1)
- Standard deviation = √variance
The 68-95-99.7 Rule
For normally distributed data: ~68% of values fall within ±1σ, ~95% within ±2σ, ~99.7% within ±3σ of the mean. This rule is used extensively in quality control, finance and experimental sciences.
Population vs. Sample
Use population σ when you have data for every member of the group (e.g. heights of all students in a class). Use sample s when your data is a subset drawn from a larger population (e.g. a survey of 50 people to estimate national averages). Dividing by n−1 corrects the tendency to underestimate variability in small samples.
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