Variance is a measure of the amount of variability or scatter in our numerical data when compared to the mean, or average. Calculating variance is a three-step process that involves determining the average of a set of numbers, calculating the squared difference of each number, and averaging the squared numbers.
To determine the variance, for example, in the distances between your town and three others, first find the average distance. If the individual distances are 12, 18, and 27 miles, add them together and divide by the number of data points.
12 + 18 + 27 = 57 / 3 = 19
Next, for each data point, subtract the mean and then square the result.
12 - 19 = (-7)^2 = 49 18 - 19 = (-1)^2 = 1 27 - 19 = 8^2 = 64
Lastly, determine the mean of the results.
49 + 1 + 64 = 114 / 3 = 38
The distance variance for the three towns is 38 square miles.
