Interpretation of

Standard Deviation

By: Sakina Hassan

Aqsa Aziz
Amber Nadeem
Sehar Hameed

Case Study:

The following is a data set collected during the late

1970s and 1980s involving road construction contracts
in the state of Florida. It is a list of Low-Bid-Estimate
ratios for competitive contracts. We will use
Tchebysheffs Theorem to see if the data set is skewed
or not.

To interpret whether the data set is skewed or

normal we must apply the Tchebysheffs theorem
to its standard deviation and mean

The data set that we have been given is ungrouped

STANDARD DEVIATION

the square of the difference between each value and

the mean of the distribution, divided by the sum of the
squares by the total number of values and finally take
the square root, symbolically:

Where xi is each variable,

the total number of values.

is the mean and n is

MEAN

to find standard deviation we will need to find the

mean of the distribution first.

the sum of all the values and then we will divide this
sum by the total number of values, symbolically:

Where xi is each value and n is the total number of

values.

CALCULATION OF MEAN

we apply the formula to the given data set to calculate the

mean thus:

= (0.84706 + 0.79604 + 0.99504 + +

0.85552 + 0.82356 +0.94421)
194

= 0.9072488
This is the mean value of the distribution.

Next we find difference between each value and the mean

and then we must square it. To do this we will arrange our
data in a table as shown:

xi

xi-

(xi-

)2

0.84706

-0.0576115

0.003319084932

0.79604

-0.1086315

0.011800802

0.99504

0.0903685

0.008166465792

.
.
.
.

.
.
.
.

.
.
.
.

0.85552

-0.0491515

0.002415869952

0.82356

-0.0811115

0.006579075432

0.94421

0.0395385

0.001563292982

table-1

CALCULATION OF STANDARD DEVIATION

We will plug in the values from the table into the

formula for standard deviation:

S = 0.13692668

INTERPRETATION OF STANDARD DEVIATION

Now to interpret the standard deviation we will use the

Tchebysheffs theorem to find the following intervals.

Where k is a constant that is 1, 2 or 3.

CONDITIONS OF NORMALITY

For the distribution to be normal the following

condition must be true when the above formula is
applied:

If k=1 then the interval must approximately be 68%

of the entire distribution

If k=2 then the interval must approximately be 97.9%

of the entire distribution

If k=1 then the interval must approximately be

99.97% of the entire distribution

INTERPRETATION OF THE GIVEN DATA

we will find out what percentage of the entire

distribution falls in the following intervals and whether
or not these percentages correspond to the conditions:
INTERVAL

(1)s

(2)s

LIMITS

PERCENTAGE

1.04417548 0.77032212

75.77%

1.18110216 - 0.63339544

93.81%

1.31802884 0.49646876

TABLE-299.48%

INTERPRETATI
ON
The data set is
mildly skewed
and that only in
the first
interval.
We can also
consider it to
be
approximately
normal.

SPSS SYSTEM
VERIFICATION

Statistics
Contracts
N

Valid

194

Missing

Mean

.9072488

Std. Error of Mean

.00983076

Median

.9133000

Mode

.82356
.13692668

Std. Deviation

.019

Variance

.81753

Range

.53256

Minimum

1.35009

Maximum
Sum
Percentile

176.00627
25
50

.
8198400

GRAPHICAL
REPRESENTATION

From fig 1 we can see

that
out
of
194
contracts the graph
shows
a
relatively
normal
distribution
which
corresponds
with the results gained
from the Tchebysheffs
theorem
shown
in
table 2.
Interpretation of the Graph: