Subject-

UNIT-II
Measures of Central Tendency

The point around which the observations concentrate in general in the central part of the data is called
central value of the data and the tendency of the observations to concentrate around a central point is
known as Central Tendency.

Objects of Statistical Average:

 To get a single value that describes the characteristics of the entire group
 To facilitate comparison

Functions of Statistical Average:

 Gives information about the whole group
 Becomes the basis of future planning and actions
 Provides a basis for analysis
 Traces mathematical relationships
 Helps in decision making

Requisites of an Ideal Average:

 Simple and rigid definition
 Easy to understand
 Simple and easy to compute
 Basedonallobservations
 Least affected by extreme values
 Least affected by fluctuations of sampling
 Capable of further algebraic treatment

ARITHMETIC MEAN( )
Arithmetic Mean of a group of observations is the quotient obtained by dividing the sum of all
observations by their number. It is the most commonly used average or measure of the central
tendency applicable only in case of quantitative data. Arithmetic mean is also simply called “mean”.
Arithmetic mean is denoted by .
Merits of Arithmetic Mean:
 It is rigidly defined.
 It is easy to calculate and simple to follow.
 It is based on all the observations.
 It is readily put to algebraic treatment.
 It is least affected by fluctuations of sampling.

Demerits of Arithmetic Mean:

 The arithmetic mean is highly affected by extreme values.
 It cannot average the ratios and percentages properly.
 It cannot be computed accurately if any item is missing.
 The mean sometimes does not coincide with any of the observed value.
 It cannot be determined by inspection.
 It cannot be calculated in case of open ended classes.

Use of Arithmetic Mean:

Arithmetic Mean is recommended in following situation:
 When the frequency distribution is symmetrical.
 When we need as table average.

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 When other measures such as standard deviation, coefficient of correlation are to be computed
later.

MEDIAN(M)
The median is that value of the variable which divides the group into two equal parts, one part
comprising of all values greater and other of all values less than the median. For calculation of median
the data has to be arranged in either ascending or descending order. Median is denoted by M.

Merits of Median:
 It is easily understood and easy to calculate.
 It is rigidly defined.
 It can sometimes belocated by simple inspection and can also be computed graphically.
 It is positional average therefore not affected at all by extreme observations.
 It is only average to be used while dealing with qualitative data like intelligence, honesty etc.
 It is especially useful incase of open end classes since only the position and not the value of
items must be known.

Demerits of Median:
 For calculation, it is necessary to arrange data in ascending or descending order.
 Since it is a positional average, its value is not determined by each and every observation.
 It is not suitable for further algebric treatment.
 It is not accurate for large data.
 The value of median is more affected by sampling fluctuations than the value of the arithmetic
mean.

Uses of Median:
The use of median Is recommended in the following situations:
 When there are open-ended classes provided it does not fall in those classes.
 When exceptionally large or small values occur at the ends of the frequency distribution.
 When the observation cannot be measured numerically but can be ranked in order.
 To determine the typical value in the problems concerning distribution of wealth etc.

MODE (Z)
Mode is the value which occurs the greatest number of times in the data. The word mode has been
derived from the French word ‘La Mode’ which implies fashion. The Mode of a distribution is the value
at the point around which the items tend to be most heavily concentrated. It may be regarded as the
most typical of a series of values. Mode is denoted by Z.

Merits of Mode:
 It is easy to understand and simple to calculate.
 It is not affected by extreme large or small values.
 It can be located only by inspection in ungrouped data and discrete frequency distribution.
 It can be useful for qualitative data.
 It can be computed in open-end frequency table.
 It can be located graphically.

Demerits of Mode:
 It is not well defined.
 It is not based on all the values.
 It is stable for large values and it will not be well defined if the data consists of small number of
values.

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 It is not capable of further mathematical treatment.

 Sometimes, the data has one or more than one mode and sometimes the data has no mode at all.

Uses of Mode:
The use of mode is recommended in the following situations:
 When a quick approximate measure of central tendency is desired.
 When the measure of central tendency should be the most typical value.

GEOMETRIC MEAN(G.M)
The geometric mean also called geometric average is then the root of the product of non-negative
quantities. Geometric Mean is denoted by G.M.

Properties of Geometric Mean:

 The geometric mean is less than arithmetic mean, G.M<A.M
 The product of the items remains unchanged if each item is replaced by the geometric mean.
 The geometric mean of the ratio of corresponding observations in two series is equal to the
ratios their geometric means.
 The geometric mean of the products of corresponding items in two series.

Merits of Geometric Mean:

 It is rigidly defined and its value is a precise figure.
 It is based on all observations.
 It is capable of further algebraic treatment.
 It is not much affected by fluctuation of sampling.
 It is not affected by extreme values.

Demerits of Geometric Mean:

 It cannot be calculated if any of the observation is zero or negative.
 Its calculation is rather difficult.
 It is not easy to understand.
 It may not coincide with any of the observations.

Uses of Geometric Mean:

 Geometric Mean is appropriate when:
 Large observations are to be given less weight.
 We find the relative changes such as the average rate of population growth, the average
rate of interest etc.
 Where some of the observations are too small and/ or too large.
 Also used for construction of Index Numbers.

HARMONIC MEAN (H.M)

Harmonic mean is another measure of central tendency. Harmonic mean is also useful for quantitative
data. Harmonic mean is quotient of “number of the given values” and “sum of the reciprocals of the
given values”. It is denoted by H.M.

Merits of Harmonic Mean:

 It is based on all observations.
 It not much affected by the fluctuation of sampling.
 It is capable of algebraic treatment.
 It is an appropriate average for averaging ratios and rates.
 It does not give much weight to the large items.

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Demerits of Harmonic Mean:

 Its calculation is difficult.
 It gives high weight-age to the small items.
 It cannot be calculated if any one of the items is zero.
 It is usually a value which does not exist in the given data.

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DISPERSION
The Dispersion (Known as Scatter, spread or variations) measures the extent to which the items vary
from some central value. The measures of dispersion is also called the average of second order (Central
tendency is called average of first order).
The two distributions of statistical data may be symmetrical and have common means, median or
mode, yet they may differ widely in the scatter or their values about the measures of central tendency.

Significance/objectives of Dispersion-
 To judge there liability of average
 To compare the two an more series
 To facilitate control
 To facilitate the use of other statistical measures.

Properties of good Measure of Dispersion

 Simple to understand
 Easy to calculate
 Rigidly defined
 Based on all items
 Sampling stability
 Not unduly affected by extreme items.
 Good for further algebraic treatment

Dispersion

Based on selected Items Based on all items Graphic Method

1. Range(coefficient of 1. Mean Deviation Lorenz Curve

Range) (coefficient of M.D)
2. Inter-quartile, coefficient 2. Standard Deviation
of Range (IQR), (IQR)

1. Range: - Range (R) is defined as the difference between the value of largest item and value of
smallest item included in the distributions. Only two extreme of values are taken into
considerations. It also does not consider the frequency at all series.
2. Quartile Deviation: -Quartile Deviation is half of the difference between upper quartile (Q3)and
lower quartile (Q1). It is very much affected by sampling distribution.
3. Mean Deviation: - Mean Deviation or Average Deviation (Alpha) is arithmetic average of
deviation of all the values taken from astatistical average (Mean, Median, and Mode)of the series.
In taking deviation of values, algebraic sign + and – are also treated as positive deviations. This is
also known as first absolute moment.
4. Standard Deviation:- The standard deviation is the positive root of the arithmetic mean of the
squared deviation of various values from their arithmetic mean. The S.D. is denoted as Sigma.

Method of calculating standard Deviation-

1. Direct Method 2. Short-cut-Method 3.Step deviations Method

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Properties
Fixed Relationship among measures of dispersion in a normal distribution there is a fixed relationship
between quartile Deviation, Mean Deviation and Standard Deviation Q.D = 2/3 , Mean Deviation =
4/5.

Distinction between mean deviation and standard deviation

Base Mean Deviation Standard Deviation
1. Algebric Sign Actual +, - Signs are ignored and all Actual signs+,-are not ignored where as
deviation are taken as positive they are squared logically to be
ignored.
2. Use of Mean deviation can be computed Standard deviation is computed
Measure from mean, median, mode through mean only

4. Further It is not capable of further algebraic It is capable of further algebraic

algebraic Treatment treatment. treatment
5. Simplicity M. D is simple to understand and easy S. D is some what complex than mean
to calculate deviation.
6. Based It is based on simple average of sum It is based on square root of the average
Of absolute deviation Of the squared deviation

Variance
The square of the standard deviation is called variance. In other words the arithmetic mean of the
squares of the deviation from arithmetic mean of various values is called variance and is denoted as 2.
Variance is also known as second movement from mean. In other way, the positive root of the variance
is called S.D.
Coefficient of Variations-To compare the dispersion between two and more serieswe define coefficient
of S.D.

Interpretation of Coefficient of Variance-

Value of variance Interpretation
Smaller the value of Lesser the variability or greater the uniformity/stable/homogenous of
2 population
Larger the value of 2 Greater the variability or lesser the uniformity/consistency of the population

DISPERSION
RANGE=R
Individual Series Discrete Series Continuous Series
Range = L-S RLS RLS
Where L=Largest,
S=Smallest Observation
Coefficient of Range LS LS
L S L S L S
L S

QUARTILE DEVIATION- Q.D.

Individual Series Discrete Series Continuous Series
Q.D.Q3Q1 Q.D.Q3Q1 Q.D.Q3Q1

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Q3Q1
Coefficient of Q.D. Q3Q1Q Q3Q1Q
 3Q  3Q
Q3Q1 1 1

Standard Deviation = can be calculated through mean only

Individual Series Discrete Series Continuous Series
Direct(Through
actual mean) 
dx2 fd2  fd 2

N N N
2 2 2
Indirect(Through
assumed mean)
dx 2

 N
 d fdx 2

 N
fdx  fdx 2

 N
fdx 
N  N N  N  N  N 
     

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