Question

5B. What are some Potential Problems with quantitative variables with variances?

Answer 1

Potential Problems to calculate Variance for Quantitative variables:

1. Firstly, Variance is very much affected if extreme values are present in the data.

2. Now a quantitative variable means that it will take only numerical values and can be either Discrete or Continuous type.

Formula of sample variance =

if an observation is very large then the deviation from mean ( i.e x_i - mean(x) ) will be large too and square of it will be even larger. Variance will put more weight to that observation.

3. Variance is unit dependent. If we measure variance of weight of 10 products in gram and in kilogram then the result will be different for both of the cases.

4. We can not use variance for comparison between different data sets of different units. So we need coefficient of variation to compare between this kind of data sets. So using variance can be problematic.