The Use and Misuse of the Coefficient of Variation in Organizational Demography Research

Abstract

Demographic heterogeneity is a central theoretical construct in organizational demography research. The most commonly used measure of demographic heterogeneity is the coefficient of variation. The author critically evaluates the rationale for using this measure and shows that the use of the coefficient of variation raises a number of methodological and interpretive problems. Empirical analyses of turnover suggest that using the coefficient of variation may lead to incorrect conclusions about the effects of demographic heterogeneity.