American Institute of Certified Planners (AICP) Practice Exam

What does a larger variance in a dataset indicate?

1. The data points are closely clustered around the mean

2. The data points are more spread out from the mean

3. The data is symmetric

4. The mean is equal to the mode

The correct answer is: The data points are more spread out from the mean

A larger variance in a dataset indicates that the data points are more spread out from the mean. Variance measures the degree of dispersion in a dataset; it quantifies how much the values deviate from the mean. When variance is high, it signifies that the data points are more distributed over a wider range of values, suggesting significant differences among the data points. This spread can result from various factors within the dataset, such as diverse data entry points or a wider distribution of measurements. On the other hand, closely clustered data, symmetrical data distributions, or equal means and modes do not reflect a larger variance, as these scenarios generally indicate less variability within the dataset. Understanding variance is essential for interpreting data patterns and making informed decisions in planning and analysis contexts.