On the misperception of variability

It has long been claimed that people perceive the world as less variable and more regular than it actually is. Such misperception, if shown to exist, could explain some perplexing behaviors. However, evidence supporting the claim is indirect, and there is no explanation of its cause. As a possible cause, the authors suggest that people use sample variability as an estimate of population variability. This is so because the sampling distribution of sample variance is downward attenuated, the attenuation being substantial for sample sizes that people consider. Results of 5 experiments show that people use sample variability, uncorrected for sample size, in tasks in which a correction is normatively called for, and indeed perceive variability as smaller than it is.