Statistics Simplified# 8: Standard Deviation

Standard deviation denotes how far data points are from the mean. It represents the average distance between the mean of the data set and the individual data points.


Higher the standard deviation, the higher the variation.


Application of Standard Deviation


After mean, the standard deviation is the most commonly used in various statistical tests. A few typical applications of standard deviation:

  • Understanding the spread of data and its distribution

  • Identifying special causes of variation in the dataset

  • Standardizing the dataset (calculating Z value)

When combined with the mean, standard deviation plays a significant role in performing various statistical analyses and tests.


Calculating Standard Deviation in Excel


In Excel, we have two formulas for calculating Standard Deviation:

  • STDEV.P(<array>)



  • STDEV.S(<array>)

















Where,

P stands for a population (contains complete data of the entire scope)

S stands for a sample (contains data of a segment of the entire scope)


Depending on the dataset we are dealing with (population or sample), we use the appropriate standard deviation formula.


Also, see: Sampling