Measures of Central Tendency

Measures of Central Tendency

1.

Mathematical Averages a) Arithmetic mean or mean Simple Weighted b) Geometric Mean c) Harmonic Mean

2. Positional Averages a) Median b) Mode c) Quartiles d) Deciles e) Percentiles

Simple Arithmetic Mean

AM Sum of all observations Number of observations

x1 x2 x3 ..... xn x n 1 n x xi n i 1

Weighted Arithmetic Mean

w1 x1 w2 x2 w3 x3 ..... wn xn x w1 w2 w3 ..... wn x

w x
i 1 n

i i

w
i 1

Arithmetic Mean for Frequency Distribution

f1 x1 f 2 x2 ..... f n xn x f1 f 2 ..... f n x

fx
i 1 n

i i

f
i 1

Combined Mean
If we are given means of two related groups, then combined mean can be calculated as
n1 x1 n2 x2 x12 n1 n2

Merits and Demerits of AM

Merits It is rigidly defined It is easy to calculate It is based upon all observations It is capable of further algebraic treatment Off all the averages, AM is least affected by fluctuations in sampling Demerits It is highly affected by extreme values Cannot be used for qualitative characteristics In extremely asymmetrical data, AM is not suitable measure

Geometric Mean
GM is the nth root of the product of n items of a series
GM n x1 x2 x3.....xn

Merits and Demerits of GM

Merits It is rigidly defined It is useful in dealing with ratios and percentages It is suitable for algebraic treatments Some statistical errors such as fluctuation of sampling have least effect It is based on all observations Demerits It is difficult to compute and understand, therefore, its application is limited For negative and zero values in a series, it is difficult to apply

Harmonic Mean
The Harmonic Mean of any series is the reciprocal of the arithmetic mean of the reciprocal of the variate
1 1 1 1 AM of , ,....., H x1 x2 xn 1 1 1 ..... xn 1 x1 x2 H n

Merits and Demerits of HM

Merits It is rigidly defined It is based on all observations It is capable of further arithmetic treatment It gives more importance to smaller values Demerits It is difficult to compute When there are positive and negative values together in a series or one or more items are zero, then it is difficult to compute

The Median
Median is defined as the value of the middle term
l2 l1 M l1 (m c) f M median l1 lower lim it of the class in which median lies l2 upper lim it of the class in which median lies f frequency of the median class n 1 m 2 c cumulative frequency of the class preceding

Merits and Demerits of Median

Merits It is well defined, based on all observations Extreme values do not affect median Median can be computed for qualitative data Demerits As it is a positional average, data needs to be arranged in specific order Median computation can be time consuming for data set with large number of elements It is some times not suitable for algebraic treatment

Mode
Mode is that value of the variate which occurs maximum number of times in a series and around which other items are densely populated
Mode l1 f1 f 0 i ( f1 f 0 ) ( f1 f 2 ) l1 lower lim it of class in which mod e lies f1 frequency of class in which mod e lies f 0 frequency of class preceding the mod al class f 2 frequency of class succeeding the mod al class i class int erval

Merits and Demerits of Mode

Merits It is easy to understand and calculate It is very useful in industries Demerits It is not based on all the observations When data set contain two, three or many modes, they are difficult to interpret and compare Not suitable for algebraic treatment

Quartiles, Deciles and Percentiles

Q1 First Quartile or Lower Quartile n 1 4

3 n 1 Q3 Third Quartile orUpper Quartile 4

Dk k ( N 1) 10

k ( N 1) Pk 100

Examples
The writing instruments market in India is growing with the presence of many global brands like Parker, Cross, Mont Blanc, etc. Like any other sector, the market is broadly divided into organized and unorganized market. Following table gives the market growth rates of writing instruments. Compute the average growth rate of the market from the data.
Year 1991 - 1997 1997 - 2002 2002 - 2007 2007 - 2010 2010 - 2015 Market growth rate (%) 9.4 108 7.8 6.8 6.8

Average growth rate = 7.97%

End of Session