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Thread: Find standard deviation of costs from different sources

  1. #1
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    Find standard deviation of costs from different sources




    Hi everyone,

    I am trying to find the standard deviation of the cost of a certain health treatment. The cost consists of:
    • Out of pocket costs, sourced from a survey, from which I can find standard deviation.
    • Health insurance costs, for which I have a minimum/maximum, from which I can estimate standard deviation.
    • Government costs, which are fixed payments and therefore have a standard deviation of 0.

    The average overall cost of treatment is the sum of the means of the above. To find the standard deviation of this overall cost, do I simply sum the standard deviations, or is there a formula for this?

    Thanks for your help,
    Pat

  2. #2
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    Re: Find standard deviation of costs from different sources


    hi,
    it is the square root of the sum of the squares of the standard deviations.

    regards

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