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Data & Analytics · Intermediate

Variance

The average squared deviation from the mean, measuring how spread out data are; units are the square of the data's units.

Definition

Population variance divides by N, and sample variance divides by n - 1 (Bessel's correction) to give an unbiased estimate. Because deviations are squared, outliers have a large influence.

Example

Sample variance s² = Σ(x - x̄)² / (n - 1)

Exam tip

Sample variance uses n - 1; population variance uses N.

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