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* * * * * * * * * * * * * * * * * * * * * * * * * From variance and standard deviation to covariation and correlation * Variance or Dispersion Variance is the spread about the mean Why do we care about variance? Variance in rights protections Variance in election outcomes Variance in the presence of genocide across countries Variance in income inequality Variance in economic growth Variance in revolution * Questions In a variable that varies from 1 to 4, what is the range? A. This depends on how much it varies. B. zero C. three D. four * Variation The deviation about the mean Mean * Two sets of numbers 1 24 2 27 3 21 4 22 1 31 2 7 3 12 4 18 X1 = 31 X2 = 7… X = 17 X1 = 24 X2 = 27… X = 23.5 * Calculating variance of a population Square the deviations from the mean, then sum them, then divide by N 1 31 2 7 3 12 4 18 Mean of x = 17 (31-17)2 + (7-17)2 + (12-17)2 + (18-17)2 4 * Divide by n-1 Calculating a sample instead of a population? * The standard deviation the square root of the variance * Calculating the standard deviation Xi (Xi-Xmean)2 1 (1-3)2 = 4 2 (2-3)2 = 1 3 (3-3)2 = 0 4 (4-3)2 = 1 5 (5-3)2 = 4 Sum = 15 Mean = 15/5 = 3.0 Sum = 10 = (10/4) ?= 2.5 σ=1.58 Association Correlation, covariance Causation Time ordering Covariation Co-variation from variation? (xi - xmean)^2/n-1 average distance between the mean of x and each x value, squared aka (xi - xmean) (xi - xmean)/n-1 Note: this is not standard deviation. There is no square root Covariation? (xi - xmean) * (yi - ymean) / n-1 Covariation covariance can take any value negative infinity to positive infinity Intuitive explanation (xi - xmean) * (yi - ymean) / n-1 When x and y are high at the same time and x and y are low at the same time, then the covariance is positive They are both higher than their means and so the products being added together are positive Intuitive explanation (xi - xmean) * (yi - ymean) / n-1 When x is low when y is high and vice versa, then the covariance is negative
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