Definition: Variance is a statistical measure of the degree to which scores in a distribution differ from one another, especially in relation to the mean of the distribution. The more the scores vary from the mean, the larger the variance will be. The variance is calculated by subtracting the mean from each score and then squaring each result. The sum of these squared differences is then divided by the total number of scores to get an average squared difference of each score from the mean.
If everyone in the population had the same income, the variance would equal zero since the difference between each score and the mean would be zero.