EC0N0MICS PROJET

WORK
CENTRAL TENDENCY
POWER POINT PRESENTATION

MADE BY :- SHIKHA GAUTAM

 It is simple average of all items in a series. It is the simplest measure
of central tendencies.

No. of Matches = 5 + 6 + 7 + 8 + 9 = 35
No. of Boys = 5

Mean = Total Value of the Items = 35 = 7

No. of Items 5

FORMULA

X = X1 + X2 + X3 + …….. + Xn / N = ∑X / N
TYPES OF ARITHMETIC MEAN

Arithmetic mean is of two types :

1. Simple arithmetic mean
2. Weighted arithmetic mean

METHODS OF CALCULATING SIMPLE ARITHMETIC

MEAN

We know, there are three types of statistical series :

1. Individual series
2. Discrete series
3. Frequency distribution
 CALCULATION OF SIMPLE ARITHMETIC MEAN

In case of individual series, arithmetic mean may be calculated by 2

methods :
1. Direct method
2. Short-cut method

1. Direct method

X = ∑X / N = Total value of the items / No. of items

ILLUSTRATION.
Pocket allowance of 10 students is rupees 15,20,30,22,25,18,40,50,
55,65. Find out the average pocket allowance.
Solution:
POCKET ALLOWANCE (Rs)
(X)
15
20
30
22
25
18
40
50
55
65
∑𝑿 = 𝟑𝟒𝟎

X =∑𝑋/𝑁

= 15+20+30+22+25+18+40+50+55+65/10= 340/10 = 34

Average pocket allowance of the 10 students = Rs 34

2 . SHORT-CUT METHOD :

This method is used when the size of item is very large.

d(deviation) = X-A

Formula:-

X = A+ ∑d/N

CALCULATION OF SMALL ARITHMETIC MEAN IN DISCRETE

SERIES OR FREQUENCY ARRAY

1. Direct method
2. Short-cut method
3. Step-deviation method
1. Direct method
Formula:- X = ∑fX / ∑f

ILLUSTRATION.
Following is the weekly wage earnings of 19 workers:
Wages (Rs) 10 20 30 40 50
No. of workers 4 5 3 2 5

Solution: Wages (Rs) No. of Workers or Multiple of the

(X) Frequency (f) Value of X & Frequency (fx)
10 4 4 x 10 = 40
20 5 5 x 20 = 100
30 3 3 x 30 = 90
40 2 2 x 40 = 80
50 5 5 x 50 = 250
∑𝑓 = 19 ∑𝑓𝑋 = 560

X = ∑fX / ∑f = 560/19 = 29.47

Mean wage earnings of 19 workers = Rs 29.47
2 . Short-cut method
short-cut method of estimated mean of the discrete frequency series
user the following formula

Formula:-
X =A+ ∑fd / ∑f

3 . Step-deviation method
(i) Step deviation d’ is obtained by dividing the deviation (of the
actual value from the assumed average) by the common factor.
d’ = X-A/C = d/C

Formula:-
X = A+ ∑fd’ / ∑f x C
 CALCULATION OF SIMPLE ARITHMETIC MEAN
IN CASE OF FREQUENCE DISTRIBUTION
1. Direct method
2. Short-cut method
3. Step-deviation method

1 . Direct method
Formula:-
X = ∑fm / ∑f

2 . Short-cut method
Formula:-
X = A+ ∑fd / ∑f
3 . Step-deviation method

(i) Find out deviation of the mid value form some assumed average
That is,
d=m-A
Formula:-
X = A+ ∑fd’ / ∑f x C
 CALCULATION OF ARITHMETIC MEAN IN CASE OF
CUMULATIVE FREQUENCY DISTRIBUTION
ILLUSTRATION.
Marks in Statics of student of Class XI are given below. Find out
arithmetic mean.
Marks No. of students
Less than 10 5
Less than 20 17
Less than 30 31
Less than 40 41
Less than 40 49

Solution:
A cumulative frequency distribution should first be converted into a
Simple frequency distribution, as under:
 Conversion of a Cumulative Frequency Distribution
Into a simple frequency distribution
Marks No. of students
0-10 5
10-20 17 – 5 = 12
20-30 31 – 17 = 14
30-40 41 – 31 = 10
40-50 49 – 41 = 8

Now, mean value of the data is obtained using Direct method

Calculation of Mean
Marks(x) Mid-value Number of students or Multiple of mid-value
(m=l1+l2/2) frequency(f) &frequency (fm)
0-10 5 5 25
10-20 15 12 180
20-30 25 14 350
30-40 35 10 350
40-50 45 8 360
∑𝒇 = 49 ∑𝑓𝑚 = 1265

X = ∑fm / ∑f = 1265 / 49 = 25.82

Arithmetic Mean = 25.82 marks
CALCULATION OF ARITHMETIC MEAN IN A MID-VALUE SERIES
ILLUSRTATION.
Following table given marks in statistics of the students of a class. Find out the
marks.
Mid-values 5 10 15 20 25 30 35 40
No. of students 5 7 9 10 8 6 3 2

Solution:- In this services ,mid-values are already given. The calculation of

arithmetic mean involves the same procedure as in case of exclusive series.
CALCULATION OF ARITHMETIC MEAN
Mid-values No. of students or frequency Multiple of mid-values and frequency
(fm)
(f)
5 5 25
10 7 70
15 9 135
20 10 200
25 8 200
30 6 180
35 3 105
40 2 80
∑𝒇 = 50 ∑𝑓𝑚 = 995
 X = ∑fm / ∑f = 995 / 50 = 19.9

Mean marks = 19. 9

CALCULATION OF ARITHMETIC MEAN IN CASE OF INDUCTIVE

SERIES
ILLUSTRATION.
The following table show monthly pocket expense of the students of a class. Find out
the average pocket expenses.
Pocket expenses(Rs) 20-29 30-39 40-49 50-59 60-69

No. of students 10 8 6 4 2

Solution:-
Calculation of arithmetic mean of inclusive is the series is the same
exclusive series.
 Pocket expenses Mid-values No. of students or Deviation Step-deviation Multiple of
(Rs) (m=l1+l2/2) frequency (d = m-A) (d’= d/C) Step-deviation and
(f) (A = 44.5) (C = 10) frequency
(fd)

20-29 24.5 10 - 20 -2 - 20
30-39 34.5 8 - 10 -1 -8
40-49 44.5 6 0 0 0
50-59 54.5 4 + 10 +1 +4
60-69 64.5 2 + 20 +2 +4
∑𝑓 = 30 ∑𝑓𝑑 ′ = −20

= A + ∑𝑓𝑑 ′ / ∑𝑓 x C = 44.5 + (-20) / 30 x 10

X
= 44.5 – 20 / 3 = 44.5 – 6.67 = 37.83
Average Pocket expenses = Rs 37.83

CALCULATION OF ‘CORRECTED’ ARITHMETIC MEAN

X =∑x(Wrong) + (Correct value) – (incorrect value) / N

 WEIGHTED ARITHMETIC MEAN

CALCULATION OF WEIGHTED MEAN

Formula: XW = ∑WX/ ∑W

COMBINED ARITHMETIC MEAN

Formula: X 1,2 = X 1N1 + X 2N2 / N1 + N2

When there are more than 2 parts series, the following formula is used to
work out Combined Arithmetic Mean

Formula: X 1,2,3……n = X 1N1 + X2N2 +…+ X nNn / N1 + N2 +…+N2

 MERITS ANS DEMERITS OF ARITHMETIC MEAN
Merits :- The following are some of the main merits of arithmetic mean:

1. SIMPLICITY
2. CERTAINTY
3. BASED ON ALL ITEMS
4. ALGEBRAIC TREATMENT
5. STABILITY
6. BASIS OF COMPARISON
7. ACCURACY TEST

Demerits:- Arithmetic mean suffers from following demerits:

1. EFFECT OF EXTREME VALUE

2. MEAN VALUE MAY NOT FIGURE IN THE SERIES AT ALL
3. UNSUITABILITY
4. MISLEADING CONCLUSIONS
MEASURES OF CENTRAL TENDENCY- MEDIAN AND MODE

POSITIONAL
AVERAGES

MEDIAN PARTITION MODE

VALUE

QUARTILE DECILE PERCEN

1. MEDIAN: Median is a centrally located value of a series such that half of

the values (or items) of the series are above it and the other half below it.

Formula:-
M=Size of (N+1/2)th item
 CALCULATION OF MEDIAN FOR DIFFERENT TYPE OF STATISTICAL
SERIES

a) INDIVIDUAL SERIES AND THE MEDIAN

b) DISCRETE SERIES OR FREQUENCY ARRAY AND THE MEDIAN
c) FREQUENCY DISTRIBUTION SERIESAND THE MEDIAN
Formula:- M=l1 +( N / 2-c.f.)/f x i
d) CUMULATIVE FREQUENCY SERIES AND THE MEDIAN
Illustration: Calculate median of the following series:

Wage rate (Rs) 10 20 30 40 50 60 70 80

(lessthan)
No. of workers 15 35 60 84 96 127 198 250
Solution:-
As a first step the cumulative frequency of ‘less than’ type is converted
into a simple frequency distribution as under :
 CALCULATION OF MEDIAN
Wage rate (Rs) Cumulative Frequency Frequency (f)
0 - 10 15 15
10 - 20 35 35 – 15 = 20
20 - 30 60 60 – 35 = 25
30 - 40 84 84 – 60 = 24
40 - 50 96 (c.f.) 96 – 84 = 12
(l1) 50 - 60 127 127 – 96 = 31 (f)
60 - 70 198 198 – 127 = 71
70 - 80 250 250 – 198 = 52
∑𝑓 = 𝑁 = 250
Solution:-
M = l1 + ((N/2 – cf ) / f) x i
M = 50 + ((250/2 – 96) / 31) x 10
M = 50 + ((125 – 96) / 31) x 10
M = 50 + (29 / 31) x 10
M = 50 + 9.32 = 59.32
Median wage rate = Rs 59.32
e) INCULDING SERIES AND THE MEDIAN
ILLUSTRATION.
Calculate median of the following data:
Marks 46-50 41-45 36-40 31-35 26-30 21-25 16-20 11-15
No. of 5 11 22 35 26 13 10 7
students

Solution:- This is an inclusive series given in the descending order. It should be

converted into an exclusive series and place in the ascending order, as in the
following tables:
Conversion into Exclusive Frequency Cumulative frequency
Series (f)
10.5 – 15.5 7 7
15.5 – 20.5 10 17
20.5 – 25.5 13 30
25.5 – 30.5 26 56 (c.f.)
(l1) 30.5 – 35.5 35 (f) 91
35.5 – 40.5 22 113
40.5 – 45.5 11 124
45.5 – 50.5 5 129
N = 129
Median, M = Size of (N/2)th item; N=∑𝑓 = 129
= Size of (129/2)th item = Size of 64.5th item
Using the formula,
M = l1 + (N/2 - c.f.)/f x i
=30.5+(129/2-56)/35 x 5
=30.5+(64.5-56/35) x 5
=30.5+8.5/35 x 5
=30.5+1.2
=31.7
Median = 31.7 marks.
6. MEDIAN OF THE SERIES WITH UNEQUAL CLASS INTERVALS

ILLUSTRATION:- Calculating median of the following distribution of data:

CLASS INTERVAL 0-5 5-10 10-20 20-30 30-50 50-70 70-100

NUMBER OF 12 15 25 40 42 14 8
STUDENTS

Solution :
Estimation of Median
Class Interval Frequency (f) Cumulative
Frequency
0–5 12 12
5 – 10 15 27
10 – 20 25 52 (c.f.)
(l1) 20 – 30 40 (f) 92
30 – 50 42 134
50 – 70 14 148
70 - 100 8 156
N = 156
M = Size of (N/2)th item; N = 156
= Size of (156/2)th item = Size of 78th item
this lies in 92th cumulative frequency and the corresponding median class is
20-30.
:- l1 = 20, c.f. = 52 , f = 40 and i = 10
substituting the values in the formula, we have
M = l1 + (N/2-c.f./f) x i
= 20 + (156/2-52/40) x 10
= 20 +( 78-52/40) x 10
= 20 +(26/40) x 10
= 20 +6.5
= 26.5
Median =26.5
 MERITS OF MEDIAN

a. SIMPLICITY
b. FREE FROM THE EFFECT OF EXTREME VALUES
c. CERTAINTY
d. REAL VALUE
e. GRAPHIC PRESENTATION
f. POSSIBLE EVEN WHEN DATA IS INCOMPLETE

DEMERITS OF MEDIAN

a. LACK OF REPRESENTATIVE CHARACTER

b. UNREALISTIC
c. LACK OF ALGEBRAIC TREATMENT
2. PARTITION VALUE : QUARTILE

The value that divides the series into more than two parts is called partition value.
If a statistical series is divided into four equal parts, the end value of each part is
called a quartile .

a) Individual and discrete series

Formulae: Q1 = Size of (N+1/4)th item of the series
Q3 =Size of 3 (N+1/4)th item of the series
b) Frequency distribution series
Class interval of Q1 = Size of (N/4)th item
Class interval of Q3 = Size of 3 (N/4)th item
Formulae: Q1 = l1 + [N/4-c.f] / f x i

Q3 = l1 + [3(N/4)-c.f] / f x i
3. MODE
Mode is another important measure of central tendency of statistical series. It
is the value which occurs most frequently in the series; that is ,model value has the
highest frequency in the series .

CALCULATION OF MODE

i) CALCULATION OF MODE IN INDIVIDUAL SERIES

a) By inspection
b) By converting individual series into discrete frequency series.
ii) CALCULATION OF MODE IN DISCRETE SERIES OR FREQUENCY
ARRAY

a) Inspection method
b) Grouping method

iii) CALCULATION OF MODE IN FREQUENCY DISTRIBUTION SERIES

a) Inspection method
b) Grouping method

Formula:-
Z = l1 + (f1 – f0 / 2f1 – f0 – f2) x i
 MERITS OF MODE

1. Simple and popular

2. Less effect of marginal values
3. No need of knowing all the items or frequencies

DEMERITS OF MODE

1. Uncertain and vague

2. Difficult
3. Ignores extreme marginal frequencies