McKay's approximation for the coefficient of variation

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In statistics, McKay's approximation of the coefficient of variation is a statistic based on a sample from a normally distributed population. It was introduced in 1932 by A. T. McKay.[1] Statistical methods for the coefficient of variation often utilizes McKay's approximation.[2][3][4][5]

Let xi, i=1,2,…,n be n independent observations from a N(μ,σ2) normal distribution. The population coefficient of variation is cv=σ/μ. Let x¯ and s denote the sample mean and the sample standard deviation, respectively. Then ĉv=s/x¯ is the sample coefficient of variation. McKay's approximation is

K=(1+1cv2) (n−1) ĉv21+(n−1) ĉv2/n

Note that in this expression, the first factor includes the population coefficient of variation, which is usually unknown. When cv is smaller than 1/3, then K is approximately chi-square distributed with n−1 degrees of freedom. In the original article by McKay, the expression for K looks slightly different, since McKay defined σ2 with denominator n instead of n−1. McKay's approximation, K, for the coefficient of variation is approximately chi-square distributed, but exactly noncentral beta distributed .[6]

References