Why are variances calculated?

Variances are calculated for various reasons. Here is an example of why: A geologist wants to know where the North American Plate is moving. He measures the position one year.

When he re-measures on the same spot he did the previous year, he finds that the new data is 1 inch west of his original measurment. Therefore, he now knows the North American plate is moving west at a rate of 1 inch per year.

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