Explained and Unexplained Variation

The total variation of a variable is the sum of the squares of deviation of its values from its arithmetic average. Symbolically, it is represented by ∑x² i.e., ∑(x – x¯ )

Where,  X = Value of the variable,  And  x¯, y‾= arithmetic average of the series, X and Y respectively

Thus, for X variable, total of variation =∑(x – x¯ ) and for the Y variable, total of variation =∑(x – y¯ )2

This total of variation of a variable consists of two types of variations viz:

(i)            Explained variation and

(ii)          Unexplained variation.

The explained variation of a variable say,

Explained and Unexplained Variation