Quantitative

Techniques
1
 Statistics examples
In its plural sense, statistics is a set of numerical data e.g. Vital statistics, monthly sales, exchange rates,
etc. In its singular sense, statistics is a branch of science that deals with the collection, presentation,
analysis and interpretation of data.
 Statistics Definitions
• “Statistics is a numerical statement of facts in any department of enquiry placed in relation to each
other’. -Bowley
• “Statistics are the classified facts representing the conditions of the people in a State specially those
facts which can be stated in numbers or any tabular or classified arrangement”. –Webster
• “ Statistics can be defined as the aggregate of facts affected to a marked extent by multiplicity of causes,
numerically expressed, enumerated or estimated according to a reasonable standard of accuracy,
collected in in a systematic manner, for a pre-determined purpose and placed in relation to each other”.
–Secrist.
• Statistics is the science of collecting, organizing , analyzing, interpreting and presenting data.
Statistics vs. Parameters
• Sample Statistic – any summary measure calculated from data; e.g., could be a mean, a difference in
means or proportions, an odds ratio, or a correlation coefficient
• E.g., the mean vitamin D level in a sample of 100 men is 63 nmol/L
• E.g., the correlation coefficient between vitamin D and cognitive function in the sample of 100 men
is 0.15
• Population parameter – the true value/true effect in the entire population of interest
• E.g., the true mean vitamin D in all middle-aged and older European men is 62 nmol/L
• E.g., the true correlation between vitamin D and cognitive function in all middle-aged and older
European men is 0.15
 Important Terms
• The entire group of individuals is called the population.
• For example, a researcher may be interested in the relation between Sales (variable 1) and Goodwill (variable 2) for the
population of customer.
• Usually populations are so large that a researcher cannot examine the entire group. Therefore, a sample is selected to
represent the population in a research study. The goal is to use the results obtained from the sample to help answer
questions about the population.
• Sample : A collection of some but not all, of the elements of the population under study, used to describe the population.
• Representative Sample : A sample that contains the relevant characteristics of the populationin the same proportions as
they are included in that population.
• A variable is a characteristic or condition that can change or take on different values.
• Most research begins with a general question about the relationship between two variables for a specific group of
individuals.
• Variables can be classified as discrete or continuous.
• Discrete variables (such as class size) consist of indivisible categories,
• Continuous variables (such as time or weight) are infinitely divisible into whatever units a researcher may choose. For
example, time can be measured to the nearest minute, second, half-second, etc. To define the units for a continuous
variable, a researcher must use real limits which are boundaries located exactly half-way between adjacent categories.
 Scope of Statistics
1. Statistics and planning: Statistics in indispensable into planning in the modern age which is termed
as “the age of planning”. Almost all over the world the govt. are re- storing to planning for economic
development.
2. Statistics and economics: Statistical data and techniques of statistical analysis have to immensely
useful involving economical problem. Such as wages, price, time series analysis, demand analysis.
3. Statistics and business: Statistics is an irresponsible tool of production control. Business executive
are relying more and more on statistical techniques for studying the much and desire of the valued
customers.
4. Statistics and industry: In industry statistics is widely used inequality control. In production
engineering to find out whether the product is confirming to the specifications or not. Statistical
tools, such as inspection plan, control chart etc.
5. Statistics and mathematics: Statistics are intimately related recent advancements in statistical
technique are the outcome of wide applications of mathematics.
6. Statistics and modern science: In medical science the statistical tools for collection, presentation
and analysis of observed facts relating to causes and incidence of dieses and the result of application
various drugs and medicine are of great importance.
 Scope of Statistics (contd.)
7. Statistics, psychology and education: In education and physiology statistics has found wide
application such as, determining or to determine the reliability and validity to a test, factor analysis
etc.
8. Statistics and war: In war the theory of decision function can be a great assistance to the military and
personal to plan “maximum destruction with minimum effort.”
9. In banking: it play an important role in banking. The banks make use of statistics for a number of
purposes. The banks work on the principle that all the people who deposit their money with the banks
do not withdraw it at the same time. The bankers use statistical approaches based on probability to
estimate the numbers of depositors and their claims for a certain day.
10. In State Management (Administration):Statistics is essential for a country. Different
policies of the government are based on statistics. Statistical data are now widely used in
taking all administrative decisions. it helps in estimating the expected expenditures and
revenue from different sources. So statistics are the eyes of administration of the state.
11. In Accounting and Auditing: accounting is impossible without exactness. The correction of
the values of current asserts is made on the basis of the purchasing power of money or the
current value of it. In auditing sampling techniques are commonly used. An auditor
determines the sample size of the book to be audited on the basis of error.
 Scope of Statistics (contd.)

12. In Natural and Social Sciences: it plays a vital role in almost all the natural and social sciences. Statistical
methods are commonly used for analyzing the experiments results, testing their significance in Biology,
Physics, Chemistry, Mathematics, Meteorology, Research chambers of commerce, Sociology, Business, Public
Administration, Communication and Information Technology etc
13. In Astronomy: Astronomy is one of the oldest branches of statistical study; it deals with the measurement of
distance, sizes, masses and densities of heavenly bodies by means of observations. During these measurements
errors are unavoidable so most probable measurements are founded by using statistical methods.
14. Statistics and Government: The functions of a government are more varied and complex. Various depts. in
the state are required to collect and record statistical data in a systematic manner for an effective
administration. Data pertaining to various fields namely population, natural resources, production both
agricultural and industrial, finance, trade, exports and imports etc are the most fundamental requirements of
the state for its administration.
15. Statistics and Sociology: Sociology is one of the social sciences aiming to discover the basic structure of
human society, to identify the main forces that hold groups together. It highlights and illuminates aspects of
social life that otherwise might be only obscurely recognized and understood. The sociologist may be called
upon for help with a special problem such as social conflict, urban plight or the war on poverty or crimes
 Functions of Statistics
1. To Present Facts in Definite Form: we can represent the things in their true form with the help of figures. Without
a statistical study, our ideas would be vague and indefinite. The facts are to be given in a definite form. If the
results are given in numbers, then they are more convincing than if the results are expressed on the basis of
quality.
2. Precision to the Facts: The statistics are presented in a definite form so they also help in condensing the data into
important figures. So statistical methods present meaningful information. In other words statistics helps in
simplifying complex data to simple-to make them understandable.
3. Formulation and Testing of Hypothesis: These statistical methods help us in formulating and testing the
hypothesis or a new theory. With the help of statistical techniques, we can know the effect of imposing tax on the
exports of tea on the consumption of tea in other countries. The other example could be to study whether credit
squeeze is effective in checking inflation or not.
4. Forecasting: Statistics is not only concerned with the above functions, but it also predicts the future course of
action of the phenomena. We can make future policies on the basis of estimates made with the help of Statistics.
We can predict the demand for goods in 2005 if we know the population in 2004 on the basis of growth rate of
population in past. The statistics help in shaping future policies.
5. Policy Making: With help of statistics we can frame favourable policies. How much food is required to be imported
in 2007? It depends on the food-production in 2007 and the demand for food in 2007. Without knowing these
factors we cannot estimate the amount of imports. On the basis of forecast the government forms the policies
about food grains, housing etc. But if the forecasting is not correct, then the whole set up will be affected.
 Functions of Statistics (contd.)
6.It Enlarges Knowledge: Whipple rightly remarks that “Statistics enables one to enlarge his horizon”. So when a
person goes through various procedures of statistics, it widens his knowledge pattern. It also widens his
thinking and reasoning power. It also helps him to reach to a rational conclusion. 8.
7.To Measure Uncertainty: Future is uncertain, but statistics help the various authorities in all the phenomenon
of the world to make correct estimation by taking and analyzing the various data of the part. So the
uncertainty could be decreased. As we have to make a forecast we have also to create trend behaviors of the
past, for which we use techniques like regression, interpolation and time series analysis.
8.Reduces the Complexity of data: Statistics simplifies the complexity of data. The raw data are unintelligible.
We make them simple and intelligible by using different statistical measures. Some such commonly used
measures are graphs, averages, dispersions, skew ness, kurtosis, correlation and regression etc. These
measures help in interpretation and drawing inferences. Therefore, statistics enables to enlarge the horizon of
one's knowledge.
9.Derives valid inferences : Statistical methods mainly aim at deriving inferences from an enquiry. Statistical
techniques are often used by scholars planners and scientists to evaluate different projects. These techniques
are also used to draw inferences regarding population parameters on the basis of sample information.
10.Simplification of Complex Facts: The foremost purpose of the statistics is to simplify huge collection of
numerical data. It is beyond the reach of human mind to remember and recollect the huge facts and figures.
Statistical method makes it possible to understand the whole in the short span of time and in a better way.
 Functions of Statistics (contd.)
11. Relationship between Facts: Statistical methods are used to investigate the cause and effect
relationship between two or more facts. The relationship between demand and supply,
money-supply and price level can be best understood with the help of statistical methods.
12. Relationship between Facts: Statistical methods are used to investigate the cause and effect
relationship between two or more facts. The relationship between demand and supply,
money-supply and price level can be best understood with the help of statistical methods.
13. To Indicate Trend Behaviour: Statistics helps to indicate trend behaviour certain fields of
enquiry. The statistical techniques like Analysis of Time Series Extrapolation etc. are highly
used to know the trend behaviour of the enquiry in question.
14. Classification of Data: Classification refers to a process of splitting up the data into certain
parts which helps in the matters of comparison and interpretation of the various features of
the data. This is done by the various improved techniques statistics.
15. To Draw Rational Conclusion: In various fields of uncertainty like business and commerce, it
is very much necessary to draw rational conclusions on the basis of facts collected and
analyzed. For this, the mind of the decision maker should be free from any bias and
prejudices.
 Stages of Statistical Analysis
• Data collection: Data collection is a preliminary step of statistical investigation. Primary and
secondary data are the main source of statistical data. It is the foundation of statistics. Primary data
is the 1st hand investigation and secondary data is a data which has already been collected by
others.
• Data organization: Primary data are always haphazard. This haphazard data need to represent in
systematic manner for statistical analysis. In this stage we shot out and eliminate the unnecessary
elements from collected data.
• Presentation of data: In this stage, data should be presented in easy and attractive way. Presentation
of data should be conducted by classification, tabulation, frequency distribution, charts and graphs.
• Analysis of data: In this stage, appropriate statistical method should be applied very carefully in the
presented data for easy conclusion by using appropriate statistical technique such as measure of
central tendency, measure of dispersion, skewness, kurtosis , correlation and regression etc.
• Interpretation of data: In this stage, statistician takes decision about the results of analysis. Decision
should be taken very carefully and skillfully, because based on interpretation statistician gets desired
result.
 Characteristics of Statistics
• Statistics should be aggregate of facts: Statistics always deals with aggregate of facts. It does not deal with a single
figure. Suppose Rahim is a student of Dhaka Commerce College is 20 years old, is not a statistical statement, while a set
of ages of all the students in that college is statistical statement.
• Statistics should be expressed numerically : Statistical statement must be expressed in numbers. Qualitative
statements like good, medium, poor, beauty, intelligent etc. are not statistics unless they can be expressed in numerical
form.
• Statistics should be comparable and homogeneous : Statistical information's should be collected with a view to make
comparison with data of similar nature in different settings and the collected information will be homogeneous.
• Statistical data should be collected according to standard of accuracy Statistical data should be accurate. Although it is
not possible to collect statistical data as accurately as we desire largely because of their limitations of the measuring
instrument, attempt should be made to collect them as precise and accurate by actual measurement.
• Statistics should be affected by multiplicity of causes : Statistical information's must be affected by a number of
interrelated factors; it should not influenced by a single factor.
• Statistics should be collected in a systematic manner : A suitable plan should be prepared before collecting the data
and the work carried out in systematic manner. Data collected in haphazard manner would very likely lead to fallacious
conclusions.
• Statistics should be collected for a predetermined purpose : The purpose of data collection must be decided in
advance. The purpose should be well defined and specified. Data collection with any purpose, are not statistical data in
true sense.
 Statistical Inference
The process of making guesses about the truth from a sample.

Sample statistics
n

x
̂  X n  i 1
n
n

Truth (not observable) (x i  X n )2

ˆ 2  s 2  i 1
n 1

Sample *hat notation ^ is often used to indicate

Population (observation)“estitmate”

parameters
N N

 x  (x   )
i
2

Make guesses about

i 1
 2  i 1
N N

the whole
population
 Statistical data
The collection of data that are relevant to the problem being studied is commonly
the most difficult, expensive, and time-consuming part of the entire research project.
Statistical data are usually obtained by counting or measuring items.
Primary data are collected specifically for the analysis desired
Secondary data have already been compiled and are available for statistical analysis
A variable is an item of interest that can take on many different numerical values.
A constant has a fixed numerical value.
Statistical data are usually obtained by counting or measuring items. Most data can be
put into the following categories:
• Qualitative - data are measurements that each fail into one of several categories.
(hair color, ethnic groups and other attributes of the population)
• Quantitative - data are observations that are measured on a numerical scale
(distance traveled to college, number of children in a family, etc.)
 Qualitative data Quantitative data
Qualitative data are generally described by Quantitative data are always numbers
words or letters. They are not as widely and are the
used as quantitative data because many
numerical techniques do not apply to the result of counting or measuring
qualitative data. For example, it does not attributes of a population.
make sense to find an average hair color Quantitative data can be separated into
or blood type. two subgroups:
Qualitative data can be separated into two • Discrete (if it is the result of counting
subgroups: (the number of students of a given
Dichotomic (if it takes the form of a word ethnic group in a class, the number of
with two options (gender - male or books on a shelf, ...)
female) • Continuous (if it is the result of
Polynomic (if it takes the form of a word measuring (distance traveled, weight of
with more than two options (education - luggage, …)
primary school, secondary school and
university).
 Types of variables
Variables

Qualitative Quantitative

Dichotomic Polynomic Discrete Continuous

Amount of income
Gender, marital Brand of PC, hair Children in family,
tax paid, weight of a
status color Strokes on a golf hole
student
 Numerical scale of
measurement:
• To establish relationships between variables, researchers must observe the variables and record
their observations. This requires that the variables be measured.
• The process of measuring a variable requires a set of categories called a scale of measurement and
a process that classifies each individual into one category.
• Nominal – consist of categories in each of which the number of respective observations is
recorded. The categories are in no logical order and have no particular relationship. The
categories are said to be mutually exclusive since an individual, object, or measurement can
be included in only one of them.
• Ordinal – contain more information. Consists of distinct categories in which order is implied.
Values in one category are larger or smaller than values in other categories (e.g. rating-
excellent, good, fair, poor)
• Interval – is a set of numerical measurements in which the distance between numbers is of
a known, constant size.
• Ratio – consists of numerical measurements where the distance between numbers is of a
known, constant size, in addition, there is a non-arbitrary zero point.
 Experiments
• The goal of an experiment is to demonstrate a cause-and-effect
relationship between two variables; that is, to show that changing the
value of one variable causes changes to occur in a second variable.
• In an experiment, one variable is manipulated to create treatment
conditions. A second variable is observed and measured to obtain scores
for a group of individuals in each of the treatment conditions. The
measurements are then compared to see if there are differences between
treatment conditions. All other variables are controlled to prevent them
from influencing the results.
• In an experiment, the manipulated variable is called the independent
variable and
• the observed variable is the dependent variable.
 Why Study Statistics?
• Data are everywhere.
• Information before it is arranged or analysed by statistical methods is called raw data.
• The measurements obtained in a research study are called the data.
• The arrangement of raw data by observation in either asending or descending order is called
data array.
• Collection of data is called data set.
• A single observation from data set is called data point.
• Cumulative frequency is defined as a running total of frequencies. The frequency of an element
in a set refers to how many of that element there are in the set. Cumulative
frequency distribution can also defined as the sum of all previous frequencies up to the current
point.
• The goal of statistics is to help researchers organize and interpret the data.
• Statistical techniques are used to make many decisions that affect our lives.
• No matter what your career, you will make professional decisions that involve data. An
understanding of statistical methods will help you make these decisions effectively.
 Limitations of Statistics
• Statistics doesn’t study Qualitative phenomenon.
• Statistics doesn’t study individuals.
• Statistics can be misused.
• It does not depict entire story of phenomenon.
• Statistics are aggregates of facts. So single observation is not a statistics, it deals with groups
and aggregates only.
• Statistical methods are best applicable on quantitative data.
• Statistical cannot be applied to heterogeneous data.
• It sufficient care is not exercised in collecting, analyzing and interpretation the data, statistical
results might be misleading.
• Only a person who has an expert knowledge of statistics can handle statistical data efficiently.
• Some errors are possible in statistical decisions. Particularly the inferential statistics involves
certain errors. We do not know whether an error has been committed or not.
 Statistics and its types
• “…a set of procedures and rules…for reducing large masses of data to manageable proportions and for
allowing us to draw conclusions from those data”
• The science of collectiong, organizing, presenting, analyzing, and interpreting data to assist in making
more effective decisions
• Statistical analysis – used to manipulate summarize, and investigate data, so that useful decision-making
information results.
• Descriptive statistics are methods for organizing and summarizing data.
• For example, tables or graphs are used to organize data, and descriptive values such as the average score
are used to summarize data.
• A descriptive value for a population is called a parameter and a descriptive value for a sample is called a
statistic.
• Inferential statistics are methods for using sample data to make general conclusions (inferences) about
populations.
• Because a sample is typically only a part of the whole population, sample data provide only limited
information about the population. As a result, sample statistics are generally imperfect representatives
of the corresponding population parameters.
 Features of Statistics in terms of numerical
data
• Aggregate of Facts.
• Numerically Expressed.
• Affected by multiplicity of causes.
• Reasonable accuracy.
• Placed in relation to each other.
• Pre-determined purpose.
• Enumerated or Estimated.
• Collected in a systematic manner.
 Scope and Importance of
Statistics in Planning:
Statistics
• Statistics is indispensable in planning—may it be in business, economics or government level.
The modern age is termed as the ‘age of planning’ and almost all organisations in the
government or business or management are resorting to planning for efficient working and for
formulating policy decision.
• To achieve this end, the statistical data relating to production, consumption, birth, death,
investment, income are of paramount importance. Today efficient planning is a must for almost
all countries, particularly the developing economies for their economic development.
Statistics in Mathematics:
• Statistics is intimately related to and essentially dependent upon mathematics. The modern
theory of Statistics has its foundations on the theory of probability which in turn is a particular
branch of more advanced mathematical theory of Measures and Integration. Ever increasing role
of mathematics into statistics has led to the development of a new branch of statistics called
Mathematical Statistics.
• Thus Statistics may be considered to be an important member of the mathematics family. In the
words of Connor, “Statistics is a branch of applied mathematics which specialises in data.”
 Scope and Importance of
Statistics (Contd.)
Statistics in Economics:
• Statistics and Economics are so intermixed with each other that it looks foolishness to separate them. Development of modern
statistical methods has led to an extensive use of statistics in Economics.
• All the important branches of Economics—consumption, production, exchange, distribution, public finance—use statistics for the
purpose of comparison, presentation, interpretation, etc. Problem of spending of income on and by different sections of the people,
production of national wealth, adjustment of demand and supply, effect of economic policies on the economy etc. simply indicate the
importance of statistics in the field of economics and in its different branches.
• Statistics of Public Finance enables us to impose tax, to provide subsidy, to spend on various heads, amount of money to be
borrowed or lent etc. So we cannot think of Statistics without Economics or Economics without Statistics.
Statistics in Social Sciences:
• Every social phenomenon is affected to a marked extent by a multiplicity of factors which bring out the variation in observations from
time to time, place to place and object to object. Statistical tools of Regression and Correlation Analysis can be used to study and
isolate the effect of each of these factors on the given observation.
• Sampling Techniques and Estimation Theory are very powerful and indispensable tools for conducting any social survey, pertaining to
any strata of society and then analysing the results and drawing valid inferences. The most important application of statistics in
sociology is in the field of Demography for studying mortality (death rates), fertility (birth rates), marriages, population growth and so
on.
In this context Croxton and Cowden have rightly remarked:
“Without an adequate understanding of the statistical methods, the investigators in the social sciences may be like the blind man groping
in a dark room for a black cat that is not there. The methods of statistics are useful in an over-widening range of human activities in any
field of thought in which numerical data may be had.”
 Scope and Importance of
Statistics in Trade:
Statistics
• As already mentioned, statistics is a body of methods to make wise decisions in the face of uncertainties.
Business is full of uncertainties and risks. We have to forecast at every step. Speculation is just gaining or
losing by way of forecasting. Can we forecast without taking into view the past? Perhaps, no. The future trend
of the market can only be expected if we make use of statistics. Failure in anticipation will mean failure of
business.
• Changes in demand, supply, habits, fashion etc. can be anticipated with the help of statistics. Statistics is of
utmost significance in determining prices of the various products, determining the phases of boom and
depression etc. Use of statistics helps in smooth running of the business, in reducing the uncertainties and
thus contributes towards the success of business.

Statistics in Research Work:

• The job of a research worker is to present the result of his research before the community. The effect of a
variable on a particular problem, under differing conditions, can be known by the research worker only if he
makes use of statistical methods. Statistics are everywhere basic to research activities. To keep alive his
research interests and research activities, the researcher is required to lean upon his knowledge and skills in
statistical methods.
 Advantages of statistical thinking and operations in research
• It permits the most exact kind of description:
• The goal of science is description of phenomena. The description should be complete and accurate so that it can be useful to
anyone who can understand it when he reads the symbols. Mathematics and statistics are a part of the descriptive language, an
outgrowth of our verbal symbols.
• It forces us to be definite:
• Statistics makes the activities of a researcher definite and exact—both in his procedures and thinking. Statistics systematizes the
efforts of a researcher and leads him towards the goal.
• It helps us to summarize the results:
• Masses of observations taken by themselves are bewildering and almost meaningless. Statistics enables us to summarize our
results in meaningful and convenient form. Before we can see the forest as well as the trees, order must be given to the data.
Statistics provides an unrivalled device for bringing order out of chaos, of seeing the general picture in one’s results.
• It enables us to draw general conclusions:
• And the process of extracting conclusions is carried out according to accepted rules. Furthermore, by means of statistical steps,
we can say about how much faith should be placed in any conclusion and about how far we may extend our generalisation.
• It enables us to make predictions:
• of “how much” of a thing will happen under conditions we know and have measured. For example, we can predict the probable
mark a freshman will earn in college algebra if we know his score in a general academic aptitude test, his score in a special
algebra-aptitude test, his average mark in high-school mathematics, etc. Our prediction may be somewhat in error, but statistical
method will tell us about how much margin of error to allow in making predictions.
• It enables us to analyze some of the casual factors of complex and otherwise bewildering events.
 Applications of statistical concepts in the business
world

• Finance – Correlation And Regression, Index Numbers, Time Series Analysis.

• Marketing – Hypothesis Testing, Chi-square Tests, Nonparametric Statistics.

• Personel – Hypothesis Testing, Chi-square Tests, Nonparametric Tests.

• Operating Management – Hypothesis Testing, Estimation, Analysis Of

Variance, Time Series Analysis.
Central Tendency
 Measures of Central Tendency contd.
A single number to serve as a representative value around which all the numbers in
the set tend to cluster.

Sometimes it is referred to as a “middle” number of the data.

Measures of central tendency yield information about “particular places
or locations in a group of numbers.”
Types of measures of central tendency:

• Mean (Average)
• Median (middle)
• Mode (most)
• Quartile
• Decile
• Percentile
 Mean :: Measures of Central Tendency contd.
The mean (arithmetic mean or average) of a set of data is found by adding up all
the items and then dividing by the sum of the number of items.
Is the average of a group of numbers
Applicable for interval and ratio data, not applicable for nominal or ordinal data
Affected by each value in the data set, including extreme values
Computed by summing all values in the data set and dividing the sum by the
number of values in the data set.
The mean of a sample is denoted by X (read “x bar”).
The mean of a complete population is denoted by µ (the lower case Greek letter mu).
The mean of n data items x1, x2,…, xn, is given by the formula

   
 Objectives of Averages

• To find out one value that represents the whole mass of data.

• To enable comparison.

• To establish relationship.

• To derive inferences about universe to which sample belongs.

• To aid decision–making.
 Requisites of a Good Average

• Should be rigidly defined.

• Should be mathematically expressed.

• Should be readily comprehensible & easy to calculate.

• Should be calculated on the basis of all the observations.

• Should be least affected by extreme values and sampling fluctuations.

• Should be suitable for further mathematical treatment.

Population Mean


 X X  X  X ...  X
 1 2 3 N
N N
24  13  19  26  11

5
93

5
 18. 6

© 2002 Thomson / South-Western Slide 3-43

Sample Mean

X
 X X  X  X ...  X
 1 2 3 n
n n
57  86  42  38  90  66

6
379

6
 63.167

© 2002 Thomson / South-Western Slide 3-44

 Measures of Central Tendency contd.
Example:
Ten students were polled as to the number of siblings in their
individual families.
The raw data is the following set: {3, 2, 2, 1, 3, 6, 3, 3, 4, 2}.
Find the mean number of siblings for the ten students.
 

 
siblings
 Measures of Central Tendency contd.
Weighted Mean
The weighted mean of n numbers x1, x2,…, xn, that are
weighted by the respective factors f1, f2,…, fn is given by the
formula:
w
  x f 
.
f
 Measures of Central Tendency contd.
Weighted Mean
Listed below are the grades of a students semester courses.
Calculate the Grade Point Average (GPA).

Course Grade Points (x) Credits (f) x*f

Math A 4 5 20
History B 3 3 9
Health A 4 2 8
Art C 2 2 4

     

     
 Merits and Drawbacks of Arithmetic Mean
Merits of A.M Drawbacks of A.M
• Is rigidly defined and has a definite • Being based on all the observations, is
value. considerably affected by abnormal
• Is based on all the observations. observations.
e.g. A.M of 1000, 25, 35 & 40 will be
• Is capable of algebraic treatments (1000+25+35+40)/4 = 275 which is not at all a
for further data analysis & representative figure.
interpretation.
• Cannot be calculated even if a single
• Easy to calculate & simple to observation is missing.
understand. • Cannot be obtained just by inspection as in
• For a large no. of observations, A.M case of median & mode.
provides a good basis of comparison. • May give absurd results. For ex. If avg. no. of
children per family is to be calculated and
the result is 3.4 children per family, how
would you interpret it? 
 Merits of Arithmetic mean
• It is rigidly defined.

• It is easy to understand and easy to calculate.

• If the number of items is sufficiently large, it is more accurate and more reliable.

• It is a calculated value and is not based on its position in the series.

• It is possible to calculate even if some of the details of the data are lacking.

• Of all averages, it is affected least by fluctuations of sampling.

• It provides a good basis for comparison.

 Demerits of Arithmetic mean
• It cannot be obtained by inspection nor located through a frequency graph.

• It cannot be in the study of qualitative phenomena not capable of numerical

measurement i.e. Intelligence, beauty, honesty etc.,

• It can ignore any single item only at the risk of losing its accuracy.

• It is affected very much by extreme values.

• It cannot be calculated for open-end classes.

• It may lead to fallacious conclusions, if the details of the data from which it is computed
are not given.
 Median :: Measures of Central Tendency contd.
Another measure of central tendency, is the median.
This measure divides a group of numbers into two parts, with half the numbers
below the median and half above it.
Middle value in an ordered array of numbers.
Applicable for ordinal, interval, and ratio data
Not applicable for nominal data
Unaffected by extremely large and extremely small values i.e. The median is not
as sensitive to extreme values as the mean.
To find the median of a group of items:
1. Rank the items.
2. If the number of items is odd, the median is the middle item in the list.
3. If the number of items is even, the median is the mean of the two middle
numbers.
Median
 Measures of Central Tendency contd.
Median
Example:
Ten students in a math class were polled as to the number of
siblings in their individual families and the results were:
3, 2, 2, 1, 1, 6, 3, 3, 4, 2.
Find the median number of siblings for the ten students.
Position of the median: 10/2 = 5
Between the 5th and 6th values

Data in order: 1, 1, 2, 2, 2, 3, 3, 3, 4, 6

Median = (2+3)/2 = 2.5 siblings

 Measures of Central Tendency contd.
Median
Example:
Nine students in a math class were polled as to the number of
siblings in their individual families and the results were:
3, 2, 2, 1, 6, 3, 3, 4, 2.
Find the median number of siblings for the ten students.
Position of the median: 9/2 = 4.5
The 5th value

In order: 1, 2, 2, 2, 3, 3, 3, 4, 6

Median = 3 siblings
 Measures of Central Tendency contd.
Median
Median in a Frequency Distribution
Example:
Find the median for the distribution.
Value (x) 1 2 3 4 5
Frequency (f) 4 3 2 6 8

Position of the median is the sum of the frequencies divided by 2.

 (f) 23
Position of the median = = = 11.5 = 12th term
2 2
Add the frequencies from either side until the sum is 12.
The 12th term is the median and its value is 4.
Median : Contd.
 Merits and Drawbacks of Median
Merits of Median Drawbacks of Median

• Is rigidly defined.
• May not represent the entire series in
many cases.
• Can be easily calculated.
• Not suitable for further algebraic
treatment.
• Not affected by extreme values.
• More likely to be affected by sampling
• Can be located merely by fluctuations.
inspection..
 Mode :: Measures of Central Tendency contd.
The mode of a data set is the value that occurs the most often.
Applicable to all levels of data measurement (nominal, ordinal, interval, and ratio)
Bimodal -- Data sets that have two modes
Multimodal -- Data sets that contain more than two modes.
In a large distribution, this term is commonly applied even when the two modes do
not have exactly the same frequency.
Example:
Ten students in a math class were polled as to the number of siblings in their
individual families and the results were: 3, 2, 2, 1, 3, 6, 3, 3, 4, 2. Find the mode
for the number of siblings.
3, 2, 2, 1, 3, 6, 3, 3, 4, 2

The mode for the number of siblings is 3.

 Measures of Central Tendency contd.
Mode
Mode in a Frequency Distribution
Example:
Find the mode for the distribution.
Value (x) 1 2 3 4 5
Frequency (f) 4 3 2 6 8

The mode in a frequency distribution is the value that has the

largest frequency.
The mode for this frequency distribution is 5 as it occurs eight
times.
 Measures of Central Tendency contd.
Central Tendency from Stem-and-Leaf Displays
The mean can be calculated from the data presented in a Stem-
and-Leaf display.
The median and mode are easily identified when the “leaves”
are ranked (in numerical order) on their “stems.”
Find the median and mode.

Median: 21/2 = 10.5 11th term 1 5 6

The median is 37. 2 0 7 8 9 9
3 6 6 7 7
Mode is 42 4 0 2 2 2 3 6
5 1 6 8 8
Example-2: Find Mean, Median and
Mode of Ungroup Data

The weekly pocket money for 9 first year pupils was

found to be:

3 , 12 , 4 , 6 , 1 , 4 , 2 , 5 , 8

Mean Median Mode

5 4 4
Mode of Group Data
1
M 0  L1  h
1   2

• L1 = Lower boundary of modal class

• Δ1 = difference of frequency between
modal class and class before it
• Δ2 = difference of frequency between
modal class and class after
• H = class interval
Steps of Finding Mode

• Find the modal class which has highest frequency

• L0 = Lower class boundary of modal class
• h = Interval of modal class
• Δ1 = difference of frequency of modal
class and class before modal class
• Δ2 = difference of frequency of modal class and
class after modal class
Example -4: Find Mode
Slope Angle Midpoint (x) Frequency (f) Midpoint x
(°) frequency (fx)
0-4 2 6 12

5-9 7 12 84

10-14 12 7 84

15-19 17 5 85

20-24 22 0 0

Total n = 30 ∑(fx) = 265

 Measures of Central Tendency contd.
Symmetry in Data Sets
The analysis of a data set often depends on whether the
distribution is symmetric or non-symmetric.
Symmetric distribution: the pattern of frequencies from a
central point is the same (or nearly so) from the left and right.
 Measures of Central Tendency contd.
Symmetry in Data Sets
Non-symmetric distribution: the patterns from a central
point from the left and right are different.
Skewed to the left: a tail extends out to the left.
Skewed to the right: a tail extends out to the right.
 Relationship Between Mean,
Median,
mean
Mode
median
mode modes

pdf
pdf mean
f(x) median
f(x)
no mode
pdf
mean
(a) f(x) median (b)

mode mode

(c) median
pdf median pdf
f(x) f(x) mean
mean

(d) (d)
Quartile
 Quartile contd.
Measures of central tendency that divide a group of data into four subgroups

•Q1: 25% of the data set is below the first quartile.

•Q2: 50% of the data set is below the second quartile.
•Q3: 75% of the data set is below the third quartile.

•Q1 is equal to the 25th percentile.

•Q2 is located at 50th percentile and equals the median.
•Q3 is equal to the 75th percentile.
Q1 Q2 Q3

25% 25% 25% 25%

Quartile : Example
Quartile contd.
Quartile : Example
Quartile contd.
 Quartile : Example

Find the Quartiles.

Solution
Percentile
Example
Example
Harmonic Mean
 What is the Harmonic Mean?
The harmonic mean is a very specific type of average. It’s generally used when dealing with
averages of units, like speed or other rates and ratios.
The formula is:
                             

                                                         
If the formula above looks daunting, all you need to do to solve it is:
•Add the reciprocals of the numbers in the set.
•Divide the number of items in the set by your answer to Step 1.

Example
What is the harmonic mean of 1,5,8,10?
•Add the reciprocals of the numbers in the set: 1/1 + 1/5 + 1/8 + 1/10 = 1.425
•Divide the number of items in the set by your answer to Step 1. There are 4 items in the set,
so:
HM = 4 / 1.425 = 2.80702
 What is the Harmonic Mean?
Harmonic mean (formerly sometimes called the subcontrary mean) is one of several kinds of
average.

The harmonic mean is an average. It is calculated by dividing the number of observations by the
reciprocal of each number in the series. Thus, the harmonic mean is the reciprocal of the arithmetic
mean of the reciprocals.

Typically, it is appropriate for situations when the average of rates is desired. The harmonic mean is
the number of variables divided by the sum of the reciprocals of the variables. Useful for ratios such as
speed (=distance/time) etc.

The harmonic mean H of the positive real numbers x1,x2, ..., xn is defined to be

Ungroup Data n n Group Data

H n
H n
1 fi
i 1
xi i 1
xi
Merits of Harmonic Mean
• It is rigidly defined.
• It is defined on all observations.
• It is amenable to further algebraic treatment.
• It is the most suitable average when it is desired to give greater weight to
smaller observations and less weight to the larger ones.
Demerits of Harmonic Mean
• It is not easily understood.
• It is difficult to compute.
• It is only a summary figure and may not be the actual item in the series.
• It gives greater importance to small items and is therefore, useful only when
small items have to be given greater weightage.
• It is rarely used in grouped data.
Find the Arithmetic , Geometric and
Harmonic Mean
Class Frequency x fx f Log x f/x
(f)

20-29 3 24.5 73.5 4.17 8.17

30-39 5 34.5 172.5 7.69 6.9

40-49 20 44.5 890 32.97 2.23

50-59 10 54.5 545 17.37 5.45

60-69 5 64.5 322.5 9.05 12.9

Sum N=43 2003.5 71.24 35.64

 Relationship Among A.M. G.M.
and H.M.
• The relationships among the magnitudes of the three types of Means calculated
from the same data are as follows:  

• H.M. ≤ G.M. ≤ A.M.  

i.e. the arithmetic mean is greater than or equal to the geometric which is greater
than or equal to the harmonic mean.

• G.M. = √ (H.M. x A.M.)i.e. geometric mean is the square root of the product of
arithmetic mean and harmonic mean.

• H.M. = ( G.M.)2 / A .M. 

Important Points
• Arithmetic mean
• Use to summarize times
• Harmonic mean
• Use to summarize rates
• Geometric mean
• Don’t use for times or rates
• Variance, standard deviation, coefficient of variation
• Quantify variability
 A.M. & G.M.
• Here is an example of a problem involving (the more common) arithmetic mean:
Joe drives a car at 20 mph for the first hour and 30 mph for the second. What’s his average
speed?
The average speed is 20 + 30 / 2 = 25 mph.
• And now, for an example with the harmonic mean:
Joe drives a car at 20 mph for the half of the journey and 30 mph for the second half. What’s
his average speed?
For this problem note that we’re being told he went a certain speed for a journey segment. We
need the harmonic mean:
= 2/(1/20 + 1/30)
= 2(0.05 + 0.033)
= 2 / 0.083
= 24.09624 mph.
• The difference between these two is that the first problem is calculating an average speed
based on time, while the second is based on distance. You’ll notice that the harmonic mean is
slightly less than the arithmetic mean. This is always the case, that the harmonic mean will be
the lowest average.