How to Use Excel's VAR Function

Excel's VAR function estimates the variance of a population by calculating the compound variance of a sample. This function is identical to VARA except that VAR does not accept errors, logical values or text. The following steps will show how to use Excel's VAR function.

Instructions

Difficulty: Moderately Challenging

1. Learn the syntax for VAR. It is VAR(number_1,number_2,…) where number_1, number_2,… are up to 30 values comprising a population sample. VAR requires at least one number as an argument. Use VARP to compute the variance if these values represent the entire population.
2. Study the valid argument types for the VAR function. They may be arrays, names, numbers or references that contain numbers. Only numbers in an array or reference will be counted. Empty cells, error values, logical values or text will be ignored.
3. Enter text representation of numbers and logical values directly into the argument list. Error values or text that does not represent numbers will cause an error. Use the VARA function to include logical values or text representation of numbers in a reference.
4. Calculate the VAR as the sum of (value – AVERAGE(value1,value2,…))^2/(n-1) where value is each value in the population sample and n is the size of the population sample. For example, VAR(1345,1301,1368,1322,1310,1370,1318,1350,1303,1299) = 754.2666667.
5. Examine the method used to determine the variance. Versions of Excel prior to Excel 2003 made this calculation in a single pass. The accuracy was improved in Excel 2003 and later versions by using a two pass process to minimize round-off error.

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