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According to me, its very application specific, and depends on what you want to do. I will prefer second approach in a generic application because if 2 clusters between whom we are calculating distance are having high standard deviation, should have small distance. Another approach I can think of is a combination of the 2. Calculate the Mahalanobis distance between 2 centroids and decrease it by the sum of standard deviation of both the clusters. I thought about this idea because, when we calculate the distance between 2 circles, we calculate the distance between nearest pair of points from different circles. Now think of circumference of the circle centered by centroid of circle. and the rest is obvious :)

EDIT:

As pointed out by @MarcusD in the comment, I will try to explain a bit:

  1. I remarked "very application specific" because in some cases where our answer should remain same irrespective of the standard deviation of the data, then first approach will work better.

  2. For reference check. Kevin murphy- ML A probabilistic approach Pg. 104, 2 Class LDA. The second approach is exactly this one. If you are not having this book, google Linear discriminant analysis.

  3. The approach I gave is not theoretically different from LDA, but it is somewhat easier to implement in cases where the number of clusters is less.

According to me, its very application specific, and depends on what you want to do. I will prefer second approach in a generic application because if 2 clusters between whom we are calculating distance are having high standard deviation, should have small distance. Another approach I can think of is a combination of the 2. Calculate the Mahalanobis distance between 2 centroids and decrease it by the sum of standard deviation of both the clusters. I thought about this idea because, when we calculate the distance between 2 circles, we calculate the distance between nearest pair of points from different circles. Now think of circumference of the circle centered by centroid of circle. and the rest is obvious :)

---------Please check the edits also for this answer---------------------

According to me, its very application specific, and depends on what you want to do. I will prefer second approach in a generic application because if 2 clusters between whom we are calculating distance are having high standard deviation, should have small distance. Another approach I can think of is a combination of the 2. Calculate the Mahalanobis distance between 2 centroids and decrease it by the sum of standard deviation of both the clusters. I thought about this idea because, when we calculate the distance between 2 circles, we calculate the distance between nearest pair of points from different circles. Now think of circumference of the circle centered by centroid of circle. and the rest is obvious :)

EDIT:

As pointed out by @MarcusD in the comment, I will try to explain a bit:

  1. I remarked "very application specific" because in some cases where our answer should remain same irrespective of the standard deviation of the data, then first approach will work better.

  2. For reference check. Kevin murphy- ML A probabilistic approach Pg. 104, 2 Class LDA. The second approach is exactly this one. If you are not having this book, google Linear discriminant analysis.

  3. The approach I gave is not theoretically different from LDA, but it is somewhat easier to implement in cases where the number of clusters is less.

Source Link

According to me, its very application specific, and depends on what you want to do. I will prefer second approach in a generic application because if 2 clusters between whom we are calculating distance are having high standard deviation, should have small distance. Another approach I can think of is a combination of the 2. Calculate the Mahalanobis distance between 2 centroids and decrease it by the sum of standard deviation of both the clusters. I thought about this idea because, when we calculate the distance between 2 circles, we calculate the distance between nearest pair of points from different circles. Now think of circumference of the circle centered by centroid of circle. and the rest is obvious :)