It's important to note that Standard Deviation and the Average Distance from the Mean are not 100% equivalent. However, for the purposes of the GMAT, the concept of the Average Distance from Mean can give students a better understanding of Standard Deviation.
Consider these two sets: Set A {7,9,10,14} and set B {1,8,13,18}
The mean of set A = 10 and the mean of set B = 10
How do the Standard Deviations compare? Well, since the numbers in set B deviate the more from the mean than do the numbers in set A, we can see that the standard deviation of set B must be greater than the standard deviation of set A.
Alternatively, let's examine the Average Distance from the Mean for each set.
Set A {7,9,10,14}
Mean = 10
7 is a distance of 3 from the mean of 10
9 is a distance of 1 from the mean of 10
10 is a distance of 0 from the mean of 10
14 is a distance of 4 from the mean of 10
So, the average distance from the mean = (3+1+0+4)/4 = 2
B {1,8,13,18}
Mean = 10
1 is a distance of 9 from the mean of 10
8 is a distance of 2 from the mean of 10
13 is a distance of 3 from the mean of 10
18 is a distance of 8 from the mean of 10
So, the average distance from the mean = (9+2+3+8)/4 = 5.5
IMPORTANT: I'm not saying that the Standard Deviation of set A equals 2, and I'm not saying that the Standard Deviation of set B equals 5.5 (They are reasonably close however).
What I am saying is that the average distance from the mean can help us see that the standard deviation of set B must be greater than the standard deviation of set A.
More importantly, the average distance from the mean is a useful way to think of standard deviation. This model is a convenient way to handle most standard deviation questions on the GMAT.
Cheers,
Brent
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