What Mean deviation is
Mean Deviation (also known as the average absolute deviation or the mean absolute deviation) is a measure of variability in a set of data. It measures how far, on average, each value in a dataset is from the mean of the dataset.
Steps for Calculating Mean Deviation:
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Calculate the mean of the dataset.
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For each data point in the dataset, subtract the mean and take the absolute value of the difference.
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Add up all of the absolute differences.
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Divide the sum of the absolute differences by the total number of data points in the dataset.
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The result is the mean deviation.
Examples
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Measuring the spread of test scores from a norm or average: Mean deviation can be used to measure how far a given set of test scores deviate from the average or norm.
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Estimating the volatility of a stock’s price: Analysts use mean deviation to measure the volatility of a stock’s price over a given period of time.
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Calculating the reliability of survey results: Mean deviation can be used to measure the reliability of survey results by determining how much the responses to a survey question deviate from the average response.