What is unbiased variance?

Unbiased variance refers to a statistical measure of the spread of data points in a dataset that accounts for sample size in a way that doesn't artificially underestimate variability. The formula for calculating unbiased variance uses ( n-1 ) in the denominator instead of ( N ), where ( N ) represents the total number of data points in the population and ( n ) represents the sample size.

When calculating the variance of a sample, using ( n-1 ) instead of ( N ) corrects for the bias that arises when estimating the population variance from a sample. This adjustment is known as Bessel's correction. By using ( n-1 ), the resulting estimate of variance is unbiased, meaning it will correctly reflect the true variance of the population from which the sample was drawn, particularly when the sample size is small. This adjustment helps ensure that the estimate does not systematically underestimate the actual population variance.

The other options either involve incorrect denominators or describe other statistical concepts that do not pertain specifically to calculating unbiased variance.