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Prices, location and spread
Prices, location and spread

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3 Measuring spread

As you have already seen, it is difficult to measure price changes when they so often vary from shop to shop and region to region. Taking some average value, such as the median or the mean, helps to simplify the problem. However, it would be a mistake to ignore the notion of spread, as averages on their own can be misleading.

Information about spread can be very important in statistical analysis, where you are often interested in comparing two or more batches. In this section we shall look first at measures of spread, and then at some methods of summarising the shape of a batch of data.

But how can spread be measured? Just as there are several ways of measuring location (mean, median, etc.), there are also several ways of measuring spread. Here, we shall examine two such measures: the range and the interquartile range. (A further, even more important, measure of spread is the standard deviation. It is, however, beyond the scope of this course.)