Chapter 3:

Measures of Central Tendency or Averages

A measure of central tendency is a single value that attempts to describe a set of data by
identifying the central position within that set of data. As such, measures of central tendency
are sometimes called measures of central location. They are also classified as summary
statistics. The mean (arithmetic mean often called the average) is most likely the measure of
central tendency that you are most familiar with, but there are others, such as the geometric
mean, harmonic mean, median and the mode.

The mean, median and mode are all valid measures of central tendency, but under different
conditions, some measures of central tendency become more appropriate to use than others.

3.1 Properties of a Good Average:

i. It should be clearly defined.
ii. It should be easy to calculate.
iii. It should be simple to understand.
iv. It should be based on all the observations.
v. It should not be affected by extreme values.
vi. It should be capable of mathematical treatment.

3.2 Types of Averages: The important types of averages are given as:-
1. Arithmetic Mean (A.M)
2. Geometric Mean (G.M)
3. Harmonic Mean (H.M)
4. Median
5. Mode

3.3 Arithmetic Mean:

The arithmetic mean is the most commonly used average. In view of its common use, it is
usually referred to as the average or simply the mean.
Arithmetic mean is defined as a value obtained by dividing the sum of all observations by their
number. It is written as
𝑆𝑢𝑚 𝑜𝑓 𝑎𝑙𝑙 𝑂𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛𝑠
𝑀𝑒𝑎𝑛 =
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑂𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛𝑠
This can either be a population mean (denoted by mu) or a sample mean (denoted by x bar).
When mean is calculate from population, it is called population mean. When it is calculated
from sample, it is called sample mean.

1|Page Notes by MAM AFIFA

In the case of ungrouped data:

If we have N values in a data set and they have values 𝑥1 , 𝑥2 , … , 𝑥𝑁 , the population mean,
usually denoted by µ (Greek letter “mu”), is given as:

𝑥1 + 𝑥2 + ⋯ + 𝑥𝑁
µ=
𝑁

This formula is usually written in a slightly different manner using the Greek capital letter, ‘∑’,
pronounced "sigma", which means "sum of...”

∑𝑥
µ=
𝑁

In statistics, population and samples have very different meanings and these differences are
very important, even if, in the case of the mean, they are calculated in the same way. To
acknowledge that we are calculating the sample mean and not the population mean, then we
use “x bar”, denoted as 𝑥̅ and calculated by a formula:

∑𝑥
𝑥̅ =
𝑛

In the case of grouped data:

If 𝑥1 , 𝑥2 , … , 𝑥𝑛 are ‘n’ observations and 𝑓1 , 𝑓2 , … , 𝑓𝑛 represent the frequencies of ‘n’

observations then mean can be calculated as

∑ 𝑓𝑥
𝑥̅ = ∑𝑓
Here (∑ 𝑓 = 𝑛)

Merits and Demerits of A.M:

 The arithmetic mean has the following two advantages.
 It uses all the data values in its calculation.
 It is an unbiased statistic (meaning that, on average, it represents the true mean).
 The arithmetic mean, however, has three drawbacks.
 It is not appropriate for categorical (i.e. nominal or ordinal-scaled) data. For example,
it is not meaningful to refer to the ‘average’ colour of cars or ‘average’ preferred brand
or ‘average’ gender. The arithmetic mean can only be applied to numeric (i.e. interval
and ratio-scaled) data.
 It is distorted by outliers. An outlier is an extreme value in a data set. For example, the
mean of 3, 4, 6 and 7 is 5. However, the mean of 3, 4, 6 and 39 is 13, which is not
representative of the majority of the data values.
 It cannot be calculated for open-end classes without assuming certain limits.

2|Page Notes by MAM AFIFA

Properties of Arithmetic Mean:

i. Arithmetic mean of a constant is always itself (constant) i.e.

Mean (a) = E (a) = a
ii. Arithmetic mean is affected by change of origin i.e.
Mean x  a   Ex  a   x  a
Mean x  a   Ex  a   x  a
iii. Arithmetic mean is affected by change of scale i.e.
1  1 
Mean a..x   E a,.x   a..x Mean  .x   E  .x  
1
.x
b  b  b
iv. Sum of deviation of observations from their mean is always equal to zero i.e.
 x  x  0
v. Sum of squared deviation of observations from their mean is minimum i.e.
∑(𝑥𝑖 − 𝑥̅ )2 ≤ ∑(𝑥𝑖 − 𝑎)2 ,
where a is an arbitrary value other than the mean.

Example 1: The marks obtained by 9 students in a test are given as:

45, 32, 37, 46, 39, 36, 41, 48, 36.
Calculate the arithmetic mean.
Solution:
∑𝑥
𝑥̅ = 𝑛

45 + 32 + 37 + 46 + 39 + 36 + 41 + 48 + 36
=
9
360
= 9 = 40 𝑚𝑎𝑟𝑘𝑠

Example 2: The number of seminar training days attended last year by 20 financial advisors are
given as:

16, 20, 13, 19, 24, 22, 18, 18, 15, 20, 21, 21, 18, 20, 18, 20, 15, 20, 18, 20

What is the average number of training days attended by these financial advisors?

Example 3: SunCom is studying the number of minutes used by clients in a particular cell phone
rate plan. A random sample of 12 clients showed the following number of minutes used last
month.
90, 77, 94, 89, 119, 112, 91, 110, 92, 100, 113, 83.
What is the arithmetic mean number of minutes used?

3|Page Notes by MAM AFIFA

Example 4: Suppose a personal manager has hired 50 new employees. The ages of each of
these employees are listed as below. Find average age from the following frequency
distribution.

Ages 20-24 25-29 30-34 35-39 40-44 45-49 50-54

No. of Employees 1 4 8 11 15 9 2

Solution:

Ages No. of Employees ( f ) Class Mark (x) fx

20-24 1 22 22
25-29 4 27 108
30-34 8 32 256
35-39 11 37 407
40-44 15 42 630
45-49 9 47 423
50-54 2 52 104
Total ( ∑ ) ∑ f = 50 ---------- ∑ f x = 1950
Average Age:
∑ 𝑓𝑥 1950
𝑚𝑒𝑎𝑛 = = = 39 𝑦𝑒𝑎𝑟𝑠
∑𝑓 50
Example 5: The following data relates to the number of successful sales made by the salesmen
employed by a large microcomputer firm in a particular quarter.
Number of sales 0-4 5-9 10 - 14 15 – 19 20 - 24 25 - 29
Number of salesmen 1 14 23 21 15 6
Calculate the mean number of sales.
Solution:
Number of sales Number of salesmen ( f ) Class Mark (x) fx
0-4 1 2 1×2=2
5-9 14 7 14 × 7 = 98
10 - 14 23 12 276
15 – 19 21 17 357
20 - 24 15 22 330
25 - 29 6 27 162
Total ( ∑ ) ∑ f = 80 ---------- ∑ f x = 1225

∑ 𝑓𝑥 1225
Mean number of sales, 𝑥̅ = = = 15.3
∑𝑓 80

4|Page Notes by MAM AFIFA

3.4 Weighted Arithmetic Mean: (Special case of A.M)
When the values are not of equal importance, we assign them certain numerical values to
express their relative importance. These numerical values are called weights. It is denoted by
𝑤1 𝑥1 +𝑤2 𝑥2 +⋯+𝑤𝑛 𝑥𝑛
𝑥̅𝑤 =
𝑤1 +𝑤2 +⋯+𝑤𝑛
∑ 𝑥𝑖 𝑤𝑖
= ∑ 𝑤𝑖
The weighted mean enables us to calculate an average that takes into account the importance
of each value to the overall total.

Example 6: Suppose the Restaurant sold medium, large, and Biggie-sized soft drinks for
$0.90, $1.25, and $1.50, respectively. Of the last 10 drinks sold, 3 were medium, 4 were
large, and 3 were Biggie sized. To find the mean price of the last 10 drinks sold.
Solution:
∑ 𝑥𝑖 𝑤𝑖
𝑥̅𝑤 =
∑ 𝑤𝑖
3($0.90) + 4($1.25) + 3($1.50) $12.20
= = = $1.22
3+4+3 10
The mean selling price of the last 10 drinks is $1.22.

Example 7: The Carter Construction Company pays its hourly employees $16.50, $19.00,
or $25.00 per hour. There are 26 hourly employees, 14 of which are paid at the $16.50 rate,
10 at the $19.00 rate, and 2 at the $25.00 rate. What is the mean hourly rate paid the 26
employees?
Solution:
∑ 𝑥𝑖 𝑤𝑖
𝑥̅𝑤 =
∑ 𝑤𝑖
14($16.50) + 10($19.00) + 2($25.00) $443.00
= = = $17.038
14 + 10 + 2 26
The weighted mean hourly wage is rounded to $18.12.

Example 8: Andrews and Associates specialize in corporate law. They charge $100 an hour
for researching a case, $75 an hour for consultations, and $200 an hour for writing a brief. Last
week one of the associates spent 10 hours consulting with her client, 10 hours researching the
case, and 20 hours writing the brief. What was the weighted mean hourly charge for her legal
services?

Example 9: Calculate the weighted mean from the following data:

Item Expenditure (Rs.) Weights
Food 290 7.5
Rent 54 2.0

5|Page Notes by MAM AFIFA

 Clothing 98 1.5
Fuel and Light 75 1.0
Other items 75 0.5

Solution:
Item Expenditure ( xi ) Weights ( wi ) xi wi
Food 290 7.5 2175.0
Rent 54 2.0 108.0
Clothing 98 1.5 147.0
Fuel and Light 75 1.0 75.0
Other items 75 0.5 37.5
Total --- ∑ 𝑤𝑖 =12.5 ∑ 𝑥𝑖 𝑤𝑖 =2542.5

∑ 𝑥𝑖 𝑤𝑖 2542.5
Hence 𝑥̅ 𝑤 = ∑ 𝑤𝑖
= = 𝑅𝑠. 203.4
12.5

3.5 Geometric Mean:

The geometric mean is useful in finding the average change of percentages, ratios, indexes, or
growth rates over time. It has a wide application in business and economics because we are
often interested in finding the percentage changes in sales, salaries, or economic figures, such
as the Gross Domestic Product, which compound or build on each other. The geometric mean
(𝐺. 𝑀) is defined as the nth root of the product of n positive values. If 𝑥1 , 𝑥2 , … , 𝑥𝑛 be n positive
values, then geometric mean is defined by:

In the case of ungrouped data:

𝐺. 𝑀 = 𝑛√𝑥1 , 𝑥2 , … , 𝑥𝑛 where 𝑥 > 0

= (𝑥1 , 𝑥2 , … , 𝑥𝑛 )1⁄𝑛
When n is large, the computation of the geometric mean becomes laborious, as we have to
multiply all values and extract nth root. The arithmetic is simplified by using logarithms to the
base 10. Thus,
Taking log of both sides, we get
1
log 𝐺. 𝑀 = 𝑛 (𝑙𝑜𝑔𝑥1 + 𝑙𝑜𝑔 𝑥2 + ⋯ + 𝑙𝑜𝑔 𝑥𝑛 )
∑ 𝑙𝑜𝑔 𝑥𝑖
=
𝑛
∑ 𝑙𝑜𝑔 𝑥𝑖
𝐺. 𝑀 = 𝐴𝑛𝑡𝑖𝑙𝑜𝑔 [ ]
𝑛

In the case of grouped data:

𝑛
𝐺. 𝑀 = √𝑥1 𝑓1 × 𝑥2 𝑓2 × … × 𝑥𝑛 𝑓𝑛

6|Page Notes by MAM AFIFA

 1
𝐺. 𝑀 = (𝑥1 𝑓1 × 𝑥2 𝑓2 × … × 𝑥𝑛 𝑓𝑛 )𝑛
1
log 𝐺. 𝑀 = log (𝑥1 𝑓1 × 𝑥2 𝑓2 × … × 𝑥𝑛 𝑓𝑛 )
𝑛
1
= 𝑛 (𝑓1 log 𝑥1 + 𝑓2 log 𝑥2 + ⋯ + 𝑓𝑛 log 𝑥𝑛 )
∑ 𝑓 log 𝑥𝑖
𝐺. 𝑀 = 𝐴𝑛𝑡𝑖𝑙𝑜𝑔
∑𝑓
Note: The geometric mean will always be less than or equal to (never more than) the arithmetic
mean. Also, all the data values must be positive.

The geometric mean has the following two main disadvantages.

 It vanishes if any observation is zero.

 In case of negative values, it cannot be computed at all.
Example 10: Find the G.M of the values 10, 25, 5, and 30.
Solution: Given 10, 25, 5, 30
We know that,
𝐺. 𝑀 = 𝑛√ 𝑥1 × 𝑥2 × … × 𝑥𝑛
4
𝐺. 𝑀 = √10 × 25 × 5 × 30
4
1
𝐺. 𝑀 = √37500 = (37500)4

= (37500)0.25 = 13.915
Therefore, the geometric mean = 13.915
Example 11: The electricity tariff has increased by 12%, 8% and 16% per annum over a three-
year period. Find the average annual percentage increase in the electricity tariff.

Solution:
3
𝐺. 𝑀 = √1.12 × 1.08 × 1.16
= 1.1195
Electricity tariffs have increased by an average of 11.95 % annually over the past three years.
Example 12: Find the G.M of the following data of percentage changes in the weight of eight
animals.
45, 30, 35, 40, 44, 32, 42, 37
Solution: Here n = 8
weight of animals (x) Log (x)
45 1.6532
30 1.4771
35 1.5441
40 1.6021

7|Page Notes by MAM AFIFA

 44 1.6434
32 1.5051
42 1.6232
37 1.5682
Total Σ log(x) = 12.6164

We know that,
∑ 𝑙𝑜𝑔 𝑥𝑖
𝐺. 𝑀 = 𝐴𝑛𝑡𝑖𝑙𝑜𝑔 [ ]
𝑛
12.6164
= 𝐴𝑛𝑡𝑖𝑙𝑜𝑔( )
8

= 𝐴𝑛𝑡𝑖𝑙𝑜𝑔(1.57705)
= 37.7616
Therefore the G.M of the given data is 37.76
Example 13: The return on investment earned by Atkins Construction Company for four
successive years was: 30 percent, 20 percent, -40 percent, and 200 percent. What is the
geometric mean rate of return on investment?

Solution:
The number 1.3 represents the 30 percent return on investment, which is the “original”
investment of 1.0 plus the “return” of 0.3. The number 0.6 represents the loss of 40 percent,
which is the original investment of 1.0 less the loss of 0.4. This calculation assumes the total
return each period is reinvested or becomes the base for the next period. In other words, the
base for the second period is 1.3 and the base for the third period is (1.3)(1.2) and so forth.
Then the geometric mean rate of return is 29.4 percent, found by
4
𝐺. 𝑀 = √(1.3)(1.2)(0.6)(3.0) = 1.294
The geometric mean is the fourth root of 2.808. So, the average rate of return (compound annual
growth rate) is 29.4 percent.
Notice also that if you compute the arithmetic mean [(30 + 20 - 40 - 200) / 4 = 52.5], you would
have a much larger number, which would overstate the true rate of return!

Example 14: Find the geometric mean for the following distribution of students’ marks:

Marks 0–30 30–50 50–80 80–100

No. of Students 20 30 40 10

Solution:
Marks No. of Students Mid Points log x f logx
f x
0–30 20 15 1.1761 20 × 1.1761= 23.522
30–50 30 40 1.6021 30 × 1.6021= 48.063

8|Page Notes by MAM AFIFA

 50–80 40 65 1.8129 40 × 1.8129=72.516
80–100 10 90 1.9542 10 × 1.9542=19.542
Total ∑f=100 --- ∑flogx=163.643

∑ 𝑓 log 𝑥𝑖
𝐺. 𝑀 = 𝐴𝑛𝑡𝑖𝑙𝑜𝑔 ( )
∑𝑓
163.64
𝐺. 𝑀 = 𝐴𝑛𝑡𝑖𝑙𝑜𝑔 ( )
100

𝐺. 𝑀 = 𝐴𝑛𝑡𝑖𝑙𝑜𝑔(1.6364)

= 43.29
Therefore the G.M of the given data is 43.29

3.6 Harmonic Mean:

The Harmonic Mean (H) of a set of n values 𝑥1 , 𝑥2 , … , 𝑥𝑛 is defined as the reciprocal of the
arithmetic mean of the reciprocals of the values.
1 1 1
+ +⋯+
𝑥1 𝑥2 𝑥𝑛
𝐻. 𝑀 = 𝑅𝑒𝑐𝑖𝑝𝑟𝑜𝑐𝑎𝑙 𝑜𝑓 ( )
𝑛

𝑛
= 1 where 𝑥 ≠ 0 (For ungrouped data)
∑
𝑥𝑖

Harmonic mean is given by

∑𝑓
𝐻. 𝑀 = 1
where ∑𝑓 = 𝑛 (For grouped data)
∑ 𝑓( )
𝑥𝑖

Demerit: It cannot be calculated, if any one of the observations is zero.

Example 15: Find the H.M of 1, 2, 4, and 10.

4
Solution: 𝐻. 𝑀 = 1 1 1 1
+ + +
1 2 4 10

4 4
= =
20 + 10 + 5 + 2 37
20 20
20 80
𝐻. 𝑀 = 4 × = = 2.1621
37 37

Example 16: A teacher finds that 3 students X, Y, Z take 6, 3 and 8 minutes, respectively, to
solve a problem. Compute the average rate of solving the problem.

Solution: Given

9|Page Notes by MAM AFIFA

Time for solving the problem by X = 6 minutes.
Time for solving the problem by Y = 3 minutes.
Time for solving the problem by Z = 8 minutes.
Here n = 3.

3 3
𝐻. 𝑀 = = = 4.8 𝑚𝑖𝑛𝑢𝑡𝑒𝑠
1 1 1 15
+ +
6 3 8 24

Example 17: A tractor running at the rate of 10 Km / hr. during the first 60 km; at 20 Km / hr.
during the second 60 km; 30 Km / hr. during the third 60 km; 40 Km / hr. during the fourth 60
km and 50 Km / hr. during the fifth (last) 60 km. What would be the average speed?
Solution: Harmonic mean of the values shall give the average speed.
5
𝐻. 𝑀 =
1 1 1 1 1
10 + 20 + 30 + 40 + 50
5
= = 21.898 𝑘𝑚/ℎ𝑟
0.22833
Example 18: Find harmonic mean for the following grouped data.
Class boundaries 0-4 4-8 8-12 12-16 16-20 20-24 24-28
f 2 5 7 8 7 4 1

Solution:
Class boundaries f x 1/x f(1/x)
0-4 2 2 0.5 1
4-8 5 6 0.1667 0.8335
8-12 7 10 0.1 0.7
12-16 8 14 0.0714 0.5712
16-20 7 18 0.0556 0.3892
20-24 4 22 0.0454 0.1816
24-28 1 26 0.0385 0.0385
Total ∑f = 34 --- --- ∑f(1/x)= 3.714

∑𝑓
𝐻. 𝑀 = 1
∑ 𝑓( )
𝑥𝑖

34
= 3.714 = 9.154

10 | P a g e Notes by MAM AFIFA

3.7 When these averages should be used…

Arithmetic  Use the arithmetic mean when you have a sample that varies in the
mean same interval (no outliers)
Geometric  Use the geometric mean when your sample contains fractions.
mean  In finance it is used to find the average growth rates
Harmonic  Use he harmonic mean when your sample contains fractions and/or
mean extreme values (either too big or too small)
 It is applied in the case of times and average rates.

3.8 Median: (Middle Value of the Data)

Median is defined as the value which divides a data set that have been ordered into two equal
parts, one part greater than median and other part less than median.
Follow these steps to calculate the median for ungrouped (raw) numeric data:
 Arrange the n data values in ascending order.
 Find the median by first identifying the middle position in the data set as follows:
𝒏+𝟏 𝒕𝒉
- If n is odd, the median is (
𝟐
) observation.
𝒕𝒉 𝒕𝒉
- If n is even, the median is the average of (𝒏𝟐) and (𝒏+𝟐
𝟐
) observation.

For grouped data:

ℎ 𝑛
𝑀𝑒𝑑𝑖𝑎𝑛 = 𝑙 + 𝑓 ( 2 − 𝑐) Here (𝑛 = ∑ 𝑓)

where 𝑙 = lower class boundary of the median group or class

ℎ = width or class interval of median
𝑓 = class frequency of the median group or class
𝑐 = cumulative frequency of class preceding to the median group or class
Merits and Demerits:
 The median has several major advantages over the mean.
 It is not affected by outliers. It is therefore a more representative measure of
central location than the mean when significant outliers occur in a set of data.
 The median is easy to understand and can be calculated from any kind of data—
even for grouped data with open-ended classes such as the frequency
distribution.

11 | P a g e Notes by MAM AFIFA

 
We can find median even when our data are qualitative descriptions such as
colour or sharpness, rather than numbers.
 The median has some disadvantages as well.
 Certain statistical procedures that use the median are more complex than those
that use the mean. Also, because the median is the value at the average position,
we must array the data before we can perform any calculations. This is time
consuming for any data set with a large number of elements. Therefore, if we
want to use a sample statistic as an estimate of a population parameter, the mean
is easier to use than the median.
Example 19: Find the median of the data: 3, 11, 7, 2, 5, 9, 9, 2, 10, 15, 7.
Solution: Arrange the data in the ascending order as 2, 2, 3, 5, 7, 7, 9, 9, 10, 11, 15. Here total
number of observations n = 11 (odd). So

𝑛 + 1 𝑡ℎ
𝑀𝑒𝑑𝑖𝑎𝑛 = ( ) 𝑣𝑎𝑙𝑢𝑒
2
11 + 1 𝑡ℎ
𝑀𝑒𝑑𝑖𝑎𝑛 = ( ) 𝑣𝑎𝑙𝑢𝑒
2
12 𝑡ℎ
𝑀𝑒𝑑𝑖𝑎𝑛 = ( ) 𝑣𝑎𝑙𝑢𝑒 = 6𝑡ℎ 𝑣𝑎𝑙𝑢𝑒 = 7
2
Example 20: Suppose a personnel manager has hired 10 new employees. The ages of each of
these employees sorted from low to high is listed as follows: 25, 34, 23, 25, 54, 47, 35, 45, 52,
46. Find the median of the data.
Solution: Arrange the data in the ascending order as 23, 25, 25, 34, 35, 45, 46, 47, 52, 54.
Since number of observations is even n = 10. So,

1 𝑛 𝑡ℎ 𝑛 + 2 𝑡ℎ
𝑀𝑒𝑑𝑖𝑎𝑛 = [( ) 𝑣𝑎𝑙𝑢𝑒 + ( ) 𝑣𝑎𝑙𝑢𝑒]
2 2 2

1 10 𝑡ℎ 10 + 2 𝑡ℎ
𝑀𝑒𝑑𝑖𝑎𝑛 = [( ) 𝑣𝑎𝑙𝑢𝑒 + ( ) 𝑣𝑎𝑙𝑢𝑒]
2 2 2

1 10 𝑡ℎ 12 𝑡ℎ
𝑀𝑒𝑑𝑖𝑎𝑛 = [( ) 𝑣𝑎𝑙𝑢𝑒 + ( ) 𝑣𝑎𝑙𝑢𝑒]
2 2 2
1
𝑀𝑒𝑑𝑖𝑎𝑛 = [(5)𝑡ℎ 𝑣𝑎𝑙𝑢𝑒 + (6)𝑡ℎ 𝑣𝑎𝑙𝑢𝑒]
2
1
𝑀𝑒𝑑𝑖𝑎𝑛 = [35 + 45]
2
1
𝑀𝑒𝑑𝑖𝑎𝑛 = [80]
2
𝑀𝑒𝑑𝑖𝑎𝑛 = 40

12 | P a g e Notes by MAM AFIFA

Example 21: Find the median for the distribution of examination marks given below:

Marks 30-39 40-49 50-59 60-69 70-79 80-89 90-99

No. of Students 8 87 190 304 211 85 20

Solution:

Class Limits Class Boundaries f c.f

30-39 29.5-39.5 8 8
40-49 39.5-49.5 87 95
50-59 49.5-59.5 190 285
60-69 59.5-69.5 304 589
70-79 69.5-79.5 211 800
80-89 79.5-89.5 85 885
90-99 89.5-99.5 20 905
Total --- ∑f = 905 ---

Median Class = n / 2 = 905 / 2 = 452.5

Since 452.5th observation lies in the class (59.5-69.5), hence this is the median class.
ℎ 𝑛
𝑀𝑒𝑑𝑖𝑎𝑛 = 𝑙 + ( − 𝑐)
𝑓 2
where l = 59.5, h = 10, f = 304, c = 285, n /2 = 452.5
10
𝑀𝑒𝑑𝑖𝑎𝑛 = 59.5 + (452.5 − 285)
304

1675
= 59.5 +
304
= 59.5 + 5.5

𝑀𝑒𝑑𝑖𝑎𝑛 = 65 𝑚𝑎𝑟𝑘𝑠

3.9 Mode: (Most frequent value in the data)

The mode is defined as a value which occurs most frequently in a set of data, that it indicates
the most common result. A set of data may have more than one mode or no mode at all when
each observations occurs the same number of time. For example,
(i) The set of numbers 1, 2, 12, 6, 13, 5, 14 has no mode.
(ii) STATISTICS then Mode = S, T
For ungrouped data
Mode is the value which comes most number of time.

13 | P a g e Notes by MAM AFIFA

For grouped data
In the case of grouped data, the mode lies in the class, which has maximum frequency (called
modal class). We compute the mode by the following formula:-
𝑓𝑚 − 𝑓1
𝑀𝑜𝑑𝑒 = 𝑙 + ×ℎ
(𝑓𝑚 − 𝑓1 ) + (𝑓𝑚 − 𝑓2 )
where 𝑙 = lower class boundary of the modal class
𝑓𝑚 = frequency of the modal class
𝑓1 = frequency of class preceding the modal class
𝑓2 = frequency of the class next (following) the modal class
ℎ = width or class interval of the modal class
Merits and Demerits:
 The mode has several advantages:
 It is a valid measure of central location for all data types (i.e. categorical and
numeric).
 The mode is not influenced by outliers, as it represents the most frequently
occurring data value (or response category).
 We can use it even when one or more of the classes are open-ended.

 The mode also has several main disadvantages:

 The mode is not used as often to measure central tendency as are the mean and
median. Too often, there is no modal value because the data set contains no
values that occur more than once. Other times, every value is the mode, because
every value occurs the same number of times. Clearly, the mode is a useless
measure in these cases.
 When data set contain two, three, or many modes, they are difficult to interpret
and compare.
Example 22: The no. of automobiles insurance claims received at a district office were
recorded for 11 consecutive business days as follows
0, 2, 3, 1, 3, 2, 4, 3, 2, 3, 2
Compute the mode for this set of data.
Solution: Mode = 2, 3.

Example 23: Shoes come in full and half size. Consider the following sample that
10.0, 7.5, 8.0, 8.5, 9.0, 9.0, 10.0, 10.5, 10.0, 11.0, 11.5, 10.0
Find the mode.
Solution: Mode = 10.0

14 | P a g e Notes by MAM AFIFA

Example 24: Find the mode for the distribution of examination marks given below:
Marks 30-39 40-49 50-59 60-69 70-79 80-89 90-99
No. of Students 8 87 190 304 211 85 20

Solution:

Class Limits Class Boundaries f

30-39 29.5-39.5 8
40-49 39.5-49.5 87
50-59 49.5-59.5 190 𝑓1
60-69 59.5-69.5 304 𝑓𝑚
70-79 69.5-79.5 211 𝑓2
80-89 79.5-89.5 85
90-99 89.5-99.5 20
Total --- 905

𝑓𝑚 − 𝑓1
𝑀𝑜𝑑𝑒 = 𝑙 + ×ℎ
(𝑓𝑚 − 𝑓1 ) + (𝑓𝑚 − 𝑓2 )

where l = 59.5, 𝑓𝑚 = 304, 𝑓1 = 190, 𝑓2 = 211, ℎ = 10

304 − 190
𝑀𝑜𝑑𝑒 = 59.5 + × 10
(304 − 190) + (304 − 211)
114
= 59.5 + × 10
114 + 93
114
= 59.5 + × 10
207
1140
= 59.5 +
207
𝑀𝑜𝑑𝑒 = 59.5 + 5.5072 = 65.0 𝑚𝑎𝑟𝑘𝑠

3.10 Empirical Relation between Mean, Median and Mode:

The empirical relationship is described as follows:

a) Symmetrical Distribution: A Distribution is said to be symmetrical distribution if

mean, median and mode are equal i.e.,
Mean = Median = Mode

b) Skewed Distribution: A distribution is said to be skewed distribution if mean, median

and mode are not equal i.e.,
Mean  Median  Mode

15 | P a g e Notes by MAM AFIFA

 i. Positively Skewed Distribution:
A distribution is said to be positively skewed distribution if
Mean > Median > Mode

ii. Negatively Skewed Distribution:

A distribution is said to be negatively skewed distribution if
Mean < Median < Mode
iii. For moderately skewed distribution, median divides the distance between mean and
mode in the ratio 1 : 2 i.e.,

Mean  Median 1

Median  Mode 2

Then the following relationship satisfy

𝑀𝑒𝑎𝑛 − 𝑀𝑜𝑑𝑒 = 3(𝑀𝑒𝑎𝑛 − 𝑀𝑒𝑑𝑖𝑎𝑛)

Or
𝑀𝑜𝑑𝑒 = 3𝑀𝑒𝑑𝑖𝑎𝑛 − 2𝑀𝑒𝑎𝑛
Example 25: For a moderately skewed distribution mode = 50.04, mean= 45. Find Median.

Solution: 𝑀𝑜𝑑𝑒 = 3𝑀𝑒𝑑𝑖𝑎𝑛 − 2𝑀𝑒𝑎𝑛

50.04 = 3𝑀𝑒𝑑𝑖𝑎𝑛 − 2(45)

3𝑀𝑒𝑑𝑖𝑎𝑛 = 50.04 + 90

= 140.04
140.04
𝑀𝑒𝑑𝑖𝑎𝑛 =
3
𝑀𝑒𝑑𝑖𝑎𝑛 = 46.68

3.11 Which central location measure is best?

A central location measure must be representative of its data values. The choice depends mainly
on (a) the data type of the random variable being analysed and (b) whether outliers are present
or not in the data set.

Data type: If the data type is categorical (nominal or ordinal scaled), then the mode is the only
valid and representative measure of central location. All three measures (mean, median and
mode) can, however, be used for numeric (interval or ratio-scaled) data.

Outliers: Outliers distort the mean but do not affect the median or the mode. Thus, if outliers
are detected in a set of data, then the median (or mode) should be chosen. In such cases, the
median is preferred to the mode as it can be used in further analysis. However, if there are good
reasons to remove the outlier(s) from the data set (because they are errors or atypical data
values), then the mean can again be used as the best central location measure.

16 | P a g e Notes by MAM AFIFA

3.12 Quantiles (Quartiles, Deciles, Percentiles)
When the number of observations is quite large, the principle according to which ordered data
is into two equal parts (median) is extended to any number of divisions.

Quartiles: The three values which divide the data into four equal parts, are called quartiles.
These values are denoted by Q1, Q2 and Q3. Q1 is called the first or lower quartile, Q2 is called
the second quartile or median and Q3 is called the third or upper quartile.
For ungrouped data:
𝑖 (𝑛+1)𝑡ℎ
𝑄𝑖 = 𝑣𝑎𝑙𝑢𝑒 where i = 1, 2 and 3.
4

For grouped data:

ℎ 𝑖.𝑛
𝑄𝑖 = 𝑙 + ( 4 − 𝑐) where i = 1, 2 and 3.
𝑓

Deciles: The nine values which divide the data into ten equal parts, are called deciles. These
are denoted by 𝐷1 , 𝐷2 , … , 𝐷9 respectively.

For ungrouped data:

𝑖 (𝑛+1)𝑡ℎ
𝐷𝑖 = 𝑣𝑎𝑙𝑢𝑒 where i = 1, 2, 3…. ,9.
10

For grouped data:

ℎ 𝑖.𝑛
𝐷𝑖 = 𝑙 + (10 − 𝑐) where i = 1, 2, 3…. ,9.
𝑓

Percentiles: The ninety nine values which divide the data into hundred equal parts, are called
percentiles. These are denoted by 𝑃1 , 𝑃2 , … , 𝑃99 respectively.

For ungrouped data:

𝑖 (𝑛+1)𝑡ℎ
𝑃𝑖 = 𝑣𝑎𝑙𝑢𝑒 where i = 1, 2, 3…. ,99.
100

For grouped data:

ℎ 𝑖.𝑛
𝑃𝑖 = 𝑙 + (100 − 𝑐) where i = 1, 2, 3…. ,99.
𝑓

Example 26: Find the quartiles from the following data

7, 12, 3, 25, 37, 48, 69, 15, 52, 73, 88, 70, 80, 92, 82
Solution: Arrange the data in the ascending order as
3, 7, 12, 15, 25, 37, 48, 52, 69, 70, 73, 80, 82, 88, 92. Here n =15
1(𝑛+1)𝑡ℎ 1(15+1)𝑡ℎ
𝑄1 = 𝑣𝑎𝑙𝑢𝑒 = 𝑣𝑎𝑙𝑢𝑒 = 4𝑡ℎ 𝑣𝑎𝑙𝑢𝑒 = 15
4 4

17 | P a g e Notes by MAM AFIFA

 2 (𝑛+1)𝑡ℎ 2 (15+1)𝑡ℎ
𝑄2 = 𝑣𝑎𝑙𝑢𝑒 = 𝑣𝑎𝑙𝑢𝑒 = 8𝑡ℎ 𝑣𝑎𝑙𝑢𝑒 = 52
4 4

3(𝑛+1)𝑡ℎ 3(15+1)𝑡ℎ
𝑄3 = 𝑣𝑎𝑙𝑢𝑒 = 𝑣𝑎𝑙𝑢𝑒 = 12𝑡ℎ 𝑣𝑎𝑙𝑢𝑒 = 80
4 4

Example 27: Find the 𝑄1 and 𝑄3 from the following data

158, 151, 153, 150, 156, 155, 159, 152, 154, 157
Solution: Arrange the data in the ascending order as
150, 151, 152, 153, 154, 155, 156, 157, 158, 159. Here n =10
1(𝑛+1)𝑡ℎ
𝑄1 = 𝑣𝑎𝑙𝑢𝑒
4

1(10+1)𝑡ℎ
= 𝑣𝑎𝑙𝑢𝑒
4

= 2.75𝑡ℎ 𝑣𝑎𝑙𝑢𝑒

= 2𝑛𝑑 + 0.75(3𝑟𝑑 − 2𝑛𝑑)𝑣𝑎𝑙𝑢𝑒

= 151 + 0.75(152 − 151) = 151.75

3(𝑛+1)𝑡ℎ 3(10+1)𝑡ℎ
𝑄3 = 𝑣𝑎𝑙𝑢𝑒 = 𝑣𝑎𝑙𝑢𝑒 = 8.25𝑡ℎ 𝑣𝑎𝑙𝑢𝑒
4 4

= 8𝑡ℎ + 0.25(9𝑡ℎ − 8𝑡ℎ)𝑣𝑎𝑙𝑢𝑒

= 157 + 0.25(158 − 157) = 157.25

Example 28: Find the Quartiles for the distribution of examination marks given below:

Marks 30-39 40-49 50-59 60-69 70-79 80-89 90-99

No. of Students 8 87 190 304 211 85 20

Solution:

Class Limits Class Boundaries f cf

30-39 29.5-39.5 8 8
40-49 39.5-49.5 87 95
50-59 49.5-59.5 190 285
60-69 59.5-69.5 304 589
70-79 69.5-79.5 211 800
80-89 79.5-89.5 85 885
90-99 89.5-99.5 20 905
Total --- ∑f = 905 ---

For 𝑄1:

18 | P a g e Notes by MAM AFIFA

 𝑛 𝑡ℎ 905 𝑡ℎ
( ) 𝑣𝑎𝑙𝑢𝑒 = ( ) 𝑣𝑎𝑙𝑢𝑒 = 226.25th student which lies in the class 49.5 - 59.5. Therefore
4 4

ℎ 1.𝑛
𝑄1 = 𝑙 + ( − 𝑐)
𝑓 4

10
= 49.5 + (226.25 − 95) = 49.5 + 6.9 = 56.4 = 56 marks
190

For 𝑄2 :
𝑛 𝑡ℎ 905 𝑡ℎ
( 2) 𝑣𝑎𝑙𝑢𝑒 = ( ) 𝑣𝑎𝑙𝑢𝑒 = 452.5th student which lies in the class (59.5-69.5). Therefore
2

ℎ 2. 𝑛
𝑄2 = 𝑀𝑒𝑑𝑖𝑎𝑛 = 𝑙 + ( − 𝑐)
𝑓 4
10
= 59.5 + (452.5 − 285) = 59.5 + 5.5 = 65 𝑚𝑎𝑟𝑘𝑠
304

For 𝑄3 :

3𝑛 𝑡ℎ 3×905 𝑡ℎ
( 4 ) 𝑣𝑎𝑙𝑢𝑒 = ( ) 𝑣𝑎𝑙𝑢𝑒 = 678.75th student which lies in the class (69.5-79.5).
4
Therefore
ℎ 3.𝑛
𝑄3 = 𝑙 + ( − 𝑐)
𝑓 4

10
= 69.5 + (678.75 − 589) = 69.5 + 4.2 = 73.7 = 74 𝑚𝑎𝑟𝑘𝑠
211

3.13 Business Applications of Measure of Central Tendency:

Business Applications of Mean: Arithmetic mean is considered a deal average. It is frequently

used in all the aspects of business i.e. number of items produced per day on a large assembly
line, number of orders received per month for a firm. further In economic analysis arithmetic
mean is used extensively to calculate average production, average wage, average cost, per
capital income exports, imports, consumption, prices, etc.

Example: Say we want to find the average annual salary of all secretaries. We believe we can
do this on the basis of our knowledge of annual salaries of 6 particular secretaries, who each
earn $.10400, $34000, $14000, $25800 respectively.

Our result is a sample mean because we are interested in finding the mean
annual income of all secretaries on the basis of the annual income of a smaller sample
consisting of only 6 secretaries.

Business Applications of Median: Median is positional measures of central tendency. The

median salary gives a value close to the average salary commonly paid, without taking the
extreme values into consideration. There are mainly used in the qualitative cases like honesty,

19 | P a g e Notes by MAM AFIFA

intelligence, ability, etc. These are also suitable for the problems of distribution of income,
wealth, investment, etc

Example: The U.S. Census Bureau finds the median household income. According to the U.S.
Census Bureau, “median household income” is defined as “the amount which divides the
income distribution into two equal groups, half having income above that amount, and half
having income below that amount.”

Business Applications of Mode: The mode is the most important when an analysis is looking
for what happens most often. In analyzing prices, most of the sales occur at a particular list
price or possibly at a reduced, sale price. While there may have been sales at other prices, very
few customers will have paid an average or a mean price. Those values are therefore less
important when setting pricing in terms of what most customers paid.

Example: Mode is used to calculate the ‘modal size of a collar’, ‘modal size of shoe’, or ‘modal
size of ready-made garments’ etc.The mode may be beneficial for a manager of a shoe store.
For example, you would not see size 17 shoes stocked on the floor. Why? Because very few
people have a size 17 shoe size. Therefore, store managers may look at data and determine
which shoe size is sold the most. Managers would want to stock the floor with the best selling
shoe size.

Business Applications of Geometric Mean: Geometric Mean is used in the construction of

index number. The averages of proportions, percentages and compound rates are computed by
geometric mean. The growth of population is measured in it as population increases in
geometric progression.

Business Applications of Harmonic Mean: Harmonic mean is applied in the problems where
small items must get more relative importance than the large ones. It is useful in cases where
time, speed, values given in quantities, rate and prices are involved. But in practice, it has little
applicability.

20 | P a g e Notes by MAM AFIFA

Exercise:

Q 1: A class has 20 students whose ages (in years) are as follows. Find the mean age of the
students of the class.

14, 13, 14, 15, 12, 13, 13, 14, 15, 12, 15, 14, 12, 16, 13, 14, 14, 15, 16, 12

Q 2: The following data shows the heights in centimeters of a group of grade 10 students.
Calculate the mean height of the students.
183, 171, 158, 171, 182, 158, 164, 183, 179, 170, 182, 183, 170, 171, 167, 176, 176, 164, 176,
179, 183, 176, 170, 183, 183, 167, 167, 176, 171, 182, 179, 170

Q 3: Following distribution is the frequency distribution of first year students of a particular

college:
Age (Years) 13 14 15 16 17
Number of Students 2 5 13 7 3
Find the Arithmetic mean.

Q 4: A firm recorded the number of orders received for each of 58 successive weeks to give
the following distribution:
Number of orders received 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39
Number of weeks 3 7 15 20 9 4
Calculate the mean weekly number of orders received.

Q 5: The ages of a company’s employees are tabulated below:

Ages (in years) 20 - 25 25 - 30 30 - 35 35 - 40 40 - 45 45 - 50

Number of employees 2 14 29 43 33 9
Find the average age of employees.

Q 6: Find the geometric mean of the values 10, 5, 15, 8, 12.

Q 7: Find the geometric mean of the following grouped data for the frequency distribution of
weights.

Weights of ear heads 60-80 80-100 100-120 120-140 140-160

No of ear heads (f) 22 38 45 35 20

Q 8: Find the geometric mean and harmonic mean of the following frequency distribution of
weights.

21 | P a g e Notes by MAM AFIFA

 Weights of apples 65-84 85-104 105-124 125-144 145-164 165-184 185-204

No of apples (f) 9 10 17 10 5 4 5

Q 9: Nutritional data about a sample of seven breakfast cereals (stored in cereals) includes the
number of calories per serving such as 100, 80, 130, 190, 100, 200, 110. Compute the median
number of calories in breakfast cereals.

Q 10: The following are the two week weight gains (kg) of six young lambs of the same breed
who had been on the same diet as 11, 13, 19, 2, 10, 1. Find the value of median.

Q 11. Find the median from the following grouped data regarding heights of students in a
college.

Heights (in inches) 56-58 58-60 60-62 62-64 64-66 66-68

No. of Students 25 40 250 130 60 20

Q12: Find the harmonic mean of the values 5, 8, 10, 12, 15.
Q13: Calculate the harmonic mean from the following data:
X 1 3 5 7 9 11
f 2 4 6 8 10 12
Q 14: Calculate Quartiles for the weight of students: 50, 55, 60, 58, 52, 57, 65, 52, 61, 64, 63.
Q 15: Compute the quartiles for the following data: 25, 15, 18, 30, 20, 12, 9, 16, 15, 21, 17,
15,

Q 16: Following is the data of weights of 40 male students at a university. Compute Median,
Mode and Quartiles.

Weight 117.5-126.5 126.5-135.5 135.5-144.5 144.5-153.5 153.5-162.5

Frequency 5 8 11 10 6

Q 17: Calculate the mean, median, mode and quartiles of the following data.
Expenditure 10-19 20-29 30- 39 40-49 50-59
Frequency 15 35 45 25 12

Q 18. If median = 20, and Mean = 22.5 in a moderately skewed distribution then compute the
value of mode.
Q 19. For a moderately skewed distribution mode= 70, Median = 65. Find Mean.

22 | P a g e Notes by MAM AFIFA

Q 20: Calculate the mode for the daily wages of 40 workers in a cement factory are given
below:
100, 175, 200, 50, 125

Q 21: A systems manager in charge of a company’s network keeps track of the number of
server failures that occur in a day. Determine the mode for the following data, which represents
the number of server failures in a day for the past two weeks:
1, 3, 0, 3, 26, 2, 7, 4, 0, 2, 3, 3, 6, 3
Q 22: Calculate the mode for the data given below:
Classes 30-39 40-49 50-59 60-69 70-79 80-89 90-99
f 2 3 11 20 32 25 7

Q 23: The following frequency distribution showing the weights of apples.

Weights 65-84 85-104 105-124 125-144 145-164 165-184 185-204

f 9 10 17 10 5 4 5
Compute (i) Arithmetic Mean (ii) Median (iii) Mode (iv) Q1 and Q3.

23 | P a g e Notes by MAM AFIFA