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You are on page 1of 29

Chapter Three

GOALS

Describing Data:

Measures of Central

Tendency

**When you have completed this chapter, you
**

will be able to:

ONE

Calculate the arithmetic mean, median, mode, weighted mean, and the

geometric mean.

TWO

Explain the characteristics, uses, advantages, and disadvantages of each

measure of location.

THREE

Identify the position of the arithmetic mean, median, and mode for both a

symmetrical and a skewed distribution.

Irwin/McGraw-Hill

© The McGraw-Hill Companies,

3-2

Population Mean

**• For ungrouped data, the population mean is
**

the sum of all the population values divided

by the total number of population values:

X / N

**• where µ stands for the population mean.
**

• N is the total number of observations in the

population.

• X stands for a particular value.

indicates the operation of adding.

Irwin/McGraw-Hill

© The McGraw-Hill Companies,

000)/4 = 48. 42.000.000 + 73.000 + 23.000.3-3 EXAMPLE 1 • Parameter: a measurable characteristic of a population.500 Irwin/McGraw-Hill © The McGraw-Hill Companies. . and 73.000 + 42.000. Find the average miles covered by each car.000. The following is the mileage attained by each car: 56. • The mean is (56. • The Kiers family owns four cars. 23.

3-4 Sample Mean • For ungrouped data. the sample mean is the sum of all the sample values divided by the number of sample values: X X / n • where X stands for the sample mean • n is the total number of values in the sample Irwin/McGraw-Hill © The McGraw-Hill Companies. .

• Since these values represent a sample size of 5.000 + 15. $16. $17.400.000 +15.000. and $15. the sample mean is (14. . Irwin/McGraw-Hill © The McGraw-Hill Companies.000 + 16.000 +17.000)/5 = $15.000.000. $15.000. • A sample of five executives received the following amounts of bonus last year: $14. Find the average bonus for these five executives.000.3-5 EXAMPLE 2 • Statistic: a measurable characteristic of a sample.

. • A set of data has a unique mean.3-6 Properties of the Arithmetic Mean • Every set of interval-level and ratio-level data has a mean. • The mean is affected by unusually large or small data values. Irwin/McGraw-Hill © The McGraw-Hill Companies. • All the values are included in computing the mean. • The arithmetic mean is the only measure of central tendency where the sum of the deviations of each value from the mean is zero.

. Illustrating the fifth property. 8. The mean is 5. and 4. (3-5) + (8-5) + (4-5) = -2 +3 -1 = 0. ( X X ) 0 Irwin/McGraw-Hill © The McGraw-Hill Companies.3-7 EXAMPLE 3 • Consider the set of values: 3. In other words.

. wn ) Xw ( w * X ) / w Irwin/McGraw-Hill © The McGraw-Hill Companies. Xn... ... ... X2..wn. w2.3-8 Weighted Mean • The weighted mean of a set of numbers X1. . wnXn ) / ( w1 w2 . with corresponding weights w1.. is computed from the following formula: Xw ( w1 X 1 w2 X 2 ..

90.50.75.3-9 EXAMPLE 6 • During a one hour period on a hot Saturday afternoon cabana boy Chris served fifty drinks. (. Compute the weighted mean of the price of the drinks.90x15 + 1.875 Irwin/McGraw-Hill © The McGraw-Hill Companies. • The weighted mean is: $(.15).10x15)/(5 + 15 + 15 + 15) = $43. 75x15 + .15). (1. Number sold): (.5). (Price ($). .15). (.75/50 = $0.10.50x5 + .

There are as many values above the median as below it in the data array. Irwin/McGraw-Hill © The McGraw-Hill Companies. or the largest to the smallest. the median will be the arithmetic average of the two middle numbers. .3-10 The Median • Median: The midpoint of the values after they have been ordered from the smallest to the largest. • Note: For an even set of numbers.

20. • The age of a sample of five college students is: 21. 75. 20. • Arranging the data in ascending order gives: 19. • Arranging the data in ascending order gives: 73. and 75. 25. 76. 80. 25. and 22. Thus the median is 21. .5 Irwin/McGraw-Hill © The McGraw-Hill Companies. is 76. 73. in inches. 19. Thus the median is 75.3-11 EXAMPLE 4 • Compute the median for the following data. • the height of four basketball players. 21. 80. 22.

• It can be computed for ratio-level. Irwin/McGraw-Hill © The McGraw-Hill Companies. interval-level.3-12 Properties of the Median • There is a unique median for each data set. . and ordinal-level data. • It can be computed for an open-ended frequency distribution if the median does not lie in an open-ended class. • It is not affected by extremely large or small values and is therefore a valuable measure of central tendency when such values occur.

68. 87. 84. 75. 81. Irwin/McGraw-Hill © The McGraw-Hill Companies. 75. the modal score is 81. 93. Since the score of 81 occurs the most. 81. 87.3-13 The Mode • The mode is the value of the observation that appears most frequently. . • EXAMPLE 5: The exam scores for ten students are: 81.

indexes. The formula is: • GM n ( X 1)( X 2)( X 3). ..3-14 Geometric Mean • The geometric mean (GM) of a set of n numbers is defined as the nth root of the product of the n numbers. Irwin/McGraw-Hill © The McGraw-Hill Companies.( Xn) · Here the geometric mean is used to average percents. and relatives..

Irwin/McGraw-Hill © The McGraw-Hill Companies. 7. • The GM gives a more conservative profit figure because it is not heavily weighted by the rate of 7 percent. .3-15 EXAMPLE 7 • The interest rate on three bonds were 5. and 4 percent. • The geometric mean isGM 3 (7)(5)(4) =5.333.192. • The arithmetic mean is (6 + 3 + 2)/3 =5.

The formula for this type of problem is: n GM (value at end of period) / (value at beginning of period) 1 Irwin/McGraw-Hill © The McGraw-Hill Companies. . production or other business or economic series from one time period to another.3-16 Geometric Mean continued • Another use of the geometric mean is to determine the average percent increase in sales.

.000 in 1986 to 835. GM 8 835.0127. • Here n = 10. • That is. so (n-1) = 9.000 / 755.000 1 .000 in 1995. Irwin/McGraw-Hill © The McGraw-Hill Companies.3-17 EXAMPLE 8 • The total number of females enrolled in American colleges increased from 755.27%. the geometric mean rate of increase is 1.

3-18 The Mean of Grouped Data • The mean of a sample of data organized in a frequency distribution is computed by the following formula: Xf Xf X f n Irwin/McGraw-Hill © The McGraw-Hill Companies. .

Compute the mean number of movies showing.3-19 EXAMPLE 9 • A sample of ten movie theaters in a large metropolitan area tallied the total number of movies showing last week. Xf Xf X • f n Irwin/McGraw-Hill © The McGraw-Hill Companies. .

0 5-6 3 5.5 Total 10 1.5 28.5 16.5 9-10 3 9. .5 7-8 1 7.1 movies Irwin/McGraw-Hill © The McGraw-Hill Companies.5 7.5 3-4 2 3.5 61 61/10 = 6.3-20 EXAMPLE 9 Movies showing frequency f 1-2 continued (f)(x) 1 class midpoint X 1.5 7.

and i is the median class interval. f is the frequency of the median class.CF)/f] (i) • where L is the lower limit of the median class. Irwin/McGraw-Hill © The McGraw-Hill Companies. . CF is the cumulative frequency preceding the median class.3-21 The Median of Grouped Data • The median of a sample of data organized in a frequency distribution is computed by the following formula: • Median = L + [(n/2 .

• Divide the total number of data values by 2. . then determine which class will contain the 25th value . if n=50.3-22 Finding the Median Class • To determine the median class for grouped data: • Construct a cumulative frequency distribution. • Determine which class will contain this value. Irwin/McGraw-Hill © The McGraw-Hill Companies.the median class. 50/2 = 25. For example.

.3-23 EXAMPLE 10 Movies showing 1-2 Frequency 1 Cumulative Frequency 1 3-4 2 3 5-6 3 6 7-8 1 7 9-10 3 10 • The median class is 5-6. since it contains the 5th value (n/2 =5) Irwin/McGraw-Hill © The McGraw-Hill Companies.

3-24 EXAMPLE 10 continued • From the table. Median= 5 + [((10/2) .33 Irwin/McGraw-Hill © The McGraw-Hill Companies. L=5. f=3. . • Thus.4)/3] (2)= 6. i=2. CF=3. n=10.

. When two values occur a large number of times.5. the distribution is called bimodal. • The modes in EXAMPLE 10 are 5. Irwin/McGraw-Hill © The McGraw-Hill Companies.3-25 The Mode of Grouped Data • The mode for grouped data is approximated by the midpoint of the class with the largest class frequency. as in example 10.5 and 9.

3-26 Symmetric Distribution • zero skewness = mean Irwin/McGraw-Hill mode = median © The McGraw-Hill Companies. .

. • Mode<Median<Mean Irwin/McGraw-Hill © The McGraw-Hill Companies.3-27 Right Skewed Distribution • positively skewed: Mean and Median are to • the right of the Mode.

• Mean<Median<Mode Irwin/McGraw-Hill © The McGraw-Hill Companies. .3-28 Left Skewed Distribution • Negatively Skewed: Mean and Median are to the left of the Mode.

• Mode = mean .mode]/2 • Median = [2(mean) + mode]/3 Irwin/McGraw-Hill © The McGraw-Hill Companies. .median) • Mean = [3(median) . the third can be approximated.3-29 NOTE • If two averages of a moderately skewed frequency distribution are known.3(mean .

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