“While central tendency indicates a representative value, ‘it’ indicates the divergence of the values of different items from the central value.” Highlight any two needs and importance of this tool of statistics (given by ‘it’ in the above sentence).
Solution:
The 'it' in the given statement refers to the term 'dispersion'. Dispersion means the extent to which numerical data is likely to vary about a central value. In other words, dispersion helps to understand the distribution of the data.
Need of Dispersion in statistics:
The 'it' in the given statement refers to the term 'dispersion'. Dispersion means the extent to which numerical data is likely to vary about a central value. In other words, dispersion helps to understand the distribution of the data.
Need of Dispersion in statistics:
- Measures of dispersion give a single value indicating the degree of consistency or uniformity of distribution. This single value helps us in making comparisons of various distributions.
- A small value of dispersion means low variation between observations and average. It means that the average is a good representative of observation and very reliable. A higher value of dispersion means greater deviation among the observations. In this case, the average is not a good representative and it cannot be considered reliable.
- Dispersion can control the various conclusions drawn from central tendency.
- Dispersion measures the inequalities in the distribution of income and wealth.