3.

2 The Population Mean

Many studies involve all the values in a population. For example, there are 12 sales
associates employed at the Reynolds Road outlet of Carpets by Otto. The mean
amount of commission they earned last month was $1,345. This is a population

value, because we considered the commission of all the sales associates. Other
examples of a population mean would be:
• The mean closing price for Johnson & Johnson stock for the last 5 days is $64.75.
• The mean number of hours of overtime worked last week by the six welders in
the welding department of Butts Welding Inc. is 6.45 hours.
• Caryn Tirsch began a website last month devoted to organic gardening. The
mean number of hits on her site for the 31 days in July was 84.36.
For raw data—that is, data that have not been grouped in a frequency distribution—
the population mean is the sum of all the values in the population divided by the
number of values in the population. To find the population mean, we use the following
formula.
Instead of writing out in words the full directions for computing the population
mean (or any other measure), it is more convenient to use the shorthand symbols
of mathematics. The mean of the population using mathematical symbols is:
POPULATION MEAN [3–1]
where:
_ represents the population mean. It is the Greek lowercase letter “mu.”
N is the number of values in the population.
X represents any particular value.
Σ is the Greek capital letter “sigma” and indicates the operation of adding.
ΣX is the sum of the X values in the population.
Any measurable characteristic of a population is called a parameter. The mean of
a population is an example of a parameter.

3.6 The Median

We have stressed that, for data containing one or two very large or very small values,
the arithmetic mean may not be representative. The center for such data can
be better described by a measure of location called the median.
To illustrate the need for a measure of location other than the arithmetic mean,
suppose you are seeking to buy a condominium in Palm Aire. Your real estate agent
 says that the typical price of the units currently available is $110,000. Would you
still want to look? If you had budgeted your maximum purchase price at $75,000,
you might think they are out of your price range. However, checking the prices of
the individual units might change your mind. They are $60,000, $65,000, $70,000,
and $80,000, and a superdeluxe penthouse costs $275,000. The arithmetic mean
price is $110,000, as the real estate agent reported, but one price ($275,000) is
pulling the arithmetic mean upward, causing it to be an unrepresentative average.
It does seem that a price around $70,000 is a more typical or representative average,
and it is. In cases such as this, the median provides a more valid measure of
location.