## Variance

It's defined as the average of the squared deviations of the observed values from their arithmetic mean.

Where X is the observed value and E[X] is the arithmetic mean.

It's a measure of the variability or dispersion and it is the second-order moment of the observed value distribution. It's also used as an index for measuring the risk inherent an investment with uncertain returns, estimated on the basis of historical data.*Bibliography*

Guseo R., Statistica, CEDAM, 2006

Hardaker J. B., Huirne R. B. M.,Coping with risk in Agriculture, CABI, 2004

Leti G., Statistica descrittiva, Il Mulino, 1999

Editor: Giuliano DI TOMMASO