Variance decomposition

The total variation displayed by a set of observations, as measured by the sums of squares of deviations from the mean, may in certain circumstances be separated into components associated with defined sources of variation used as criteria of classification for the observations. Such an analysis is called an analysis of variance, although in the strict sense it is an analysis of sums of squares. Many standard situations can be reduced to the variance analysis form. OECD Source: A Dictionary of Statistical Terms, 5th edition, prepared for the International Statistical Institute by F.H.C. Marriott. Published for the International Statistical Institute by Longman Scientific and Technical.