By ratio variation we mean the arithmetic average of the ratio of the percentage deviations from the Mean in the relative series as compared to those in the subject. It gives us an idea about the variation in the relative series as compared to a constant variation in the subject series. It may be noted that the variable in which the average percentage deviation is less is generally taken as the Relative series so that the value of the ratio of variation may be less than unity.
To compute the ratio of variation, there are two types of procedure, viz:
(1) Mathematical and (2) Graphical.
The mathematical procedure of computing the ratio of variation the following steps to be taken in turn:
(i) Compute the percentage variation steps to be taken in turn: variable from the Mean value. For this, the arithmetic average of the relative should be taken as 100 , and the other values be expressed as its percentage, and the deviations these relative from the Mean value of 100 should be obtained.
(ii) Compute the percentage deviations of the subject variable from its Mean in the similar manner cited above.
(iii) Divide the percentage variation of the relative variable by the corresponding figure of the percentage variation of the subject variable.
(iv) Find the arithmetic average of quotients thus obtained and get the same as the desired ratio of variation.
Ratio of Regression.
It may be noted that the difference between the ratio of variation and unity (1) is called the ratio of regression.