School of Business

Department of Economics
Introduction to Business Statistics
BSTA205
Chapter 4 | Part 1

Describing Data:
Displaying and Exploring Data

Spring 2023 - 2024

BSTA205 - Chapter 4
 Objectives
1. Calculate and understand quartiles, deciles,
and percentiles.

2. Compute and understand the coefficient of

skewness.

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 Plan - Part 1

1. Measures of position
a. Definition
b. Calculation

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 1.a. Measures of position

 The standard deviation is the most widely used

measure of dispersion.

 Alternative ways of describing spread of data include

determining the location of values that divide a set of
observations into equal parts.

 These measures, called measures of position, include

quartiles, deciles, and percentiles.

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 Quartiles, Deciles and Percentiles
definitions

 Quartiles: Numbers that divide the data into 4 equal

part. Each part represents 25% of the data.
Min 𝑄1 𝑄2 𝑄3 𝑀𝑎𝑥
25% 25% 25% 25%

 Deciles: Numbers that divide the data into 10 equal

part. Each part represents 10% of the data.
Min 𝐷1 𝐷2 𝐷3 𝐷4 𝐷5 𝐷6 𝐷7 𝐷8 𝐷9 𝑀𝑎𝑥
10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

 Percentiles: Numbers that divide the data into 100

equal part. Each part represents 1% of the data.
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 1.b. Measures of Position calculations

Step 1: Arrange the data from minimum to maximum.

Step 2: Calculate Lp , the location of the desired percentile.

n: the number of observations.

P: percentage of observations below the desired percentile.
(example for Q1 the p=25%, in the formula you just put 25)

Step 3: Find the desired percentile

For example if we find that the location of the 23rd percentile is 14,
this means that the 14th value in the sorted data is P23 .

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 Example

Listed below are the commissions in dollars earned last

month by a sample of 15 brokers.

2,038 1,758 1,721 1,637

2,097 2,047 2,205 1,787
2,287 1,940 2,311 2,054
2,406 1,471 1,460

Locate the first quartile and the third quartile for the
commissions earned.

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 Example (cont.)

Step 1: Organize the data from lowest to

largest value

$1,460 $1,471 $1,637 $1,721

$1,758 $1,787 $1,940 $2,038
$2,047 $2,054 $2,097 $2,205
$2,287 $2,311 $2,406

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 Example (cont.)
Step 2: Compute the first and third quartiles.
Locate L25 and L75 using: (n=15)
𝑃
𝐿𝑝 = 𝑛 + 1
100
25 75
𝐿25 = (15 + 1) = 4th 𝐿75 = (15 + 1) = 12th
100 100

Step 3: Therefore the first and third quartiles are the

4th and the 12th observations.
L25=4 → Q1=$1,721
L75=12 → Q3=$2,205
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 Remark:

If Lp is a decimal number:
P = Lower Value + Decimal (Upper Value – Lower Value)

See the next example

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 Example
Given this data:
8, 7, 9, 11, 3, 14, 18.
Find the 63rd percentile.

Step 1: Arranging the data 3, 7, 8, 9, 11, 14, 18

Step 2: Calculate Lp
𝑃 63
𝐿𝑃 = 𝑛 + 1 = 7+1 = 5.04𝑡ℎ
100 100
Step 3: Find 𝑃63
5th < 5.04th < 6th
11 < 𝑃63 < 14
𝑃63 =11 + 0.04 (14 - 11) = 11.12
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 Video References:

• How to calculate Quartiles: https://youtu.be/sqv9Ao-BPYo

• How to calculate Deciles: https://youtu.be/ZKilsRfHCvk

• How to calculate percentiles: https://youtu.be/mt4xTYvnuPQ

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 For practice solve Worksheet 4
problems: 1, 2 (parts a, b, e, f).

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 End of Chapter 4 - Part 1

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