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in

MEASURES OF SKEWNESS AND


INTERPRETATION

On
01/03/2011

PRESENTED BY
GET PLACED

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

O V ER V IEW

1. What is meant by Skewness.


2. What are the different types of
Skewness Distributions.
3. Skewness Distributions in graphical
representation.
4. Calculation of Skewness Coefficient
in different (two types) methods.

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

M easures ofSkew ness

The statistical technique to indicate


the direction and extent of skewness
in the distribution of numerical
values in the data set.

A frequency distribution of the set of


values that is not
Symmetrical(normal) is called
asymmetrical or skewed.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Skew ed distributions

There are three types:


Symmetrical distribution
A.M = Median = Mode

Positively skewed distribution


A.M > Median > Mode

Negatively skewed distribution.


A.M < Median < Mode
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Skew ed distribution Curves

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


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M easures ofSkew ness

For an asymmetrical distribution, the


distance b/w Mean and Mode may be
used to measure the degree of skewness
because the Mean is equal to Mode in a
symmetrical distribution. Thus,

Absolute, Sk = Mean Mode


= Q3 + Q1 2 Median.
For Skewed distribution, if Mean>Mode, the
Skewness becomes +ive. Otherwise ive.

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

Variation tells us about the amount of


the variation where as Skewness tells
about the direction of variation.

In business and economic series,


measures of variation have greater
practical application than measures
of skewness.

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

Relative m easures of
Skew ness
Karl Pearsons Co-efficient of Skewness,

The value of SKp various b/w 3.


For moderately skewed distribution,
But moderately skewed distribution, the value of
SKp lies between 1.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Relative m easures of
Skew ness
Bowleys Coefficient of Skewness,

Kellys coefficient of Skewness,

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

Calculation ofSKp

1. Data of rejected items during a


production process is as follows:
No of 21- 26-30 31-35 36- 41-45 46- 51-
rejects(per 25 40 50 55
operator)
No of 5 15 28 42 15 12 3
operators
Calculate the mean, standard
deviation, and coefficient of
skewness and comment on the
results.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Solution:
Class Mid- Frequenc d=(m- d fd fd
value(m) y(f) A)/h
21-25 23 5 -3 9 -15 45

26-30 28 15 -2 4 -30 60

31-35 33 28 -1 1 -28 28

36-40 38 42 0 0 0 0

41-45 43 15 1 1 15 15

46-50 48 12 2 4 24 48

51-55 53 3 3 9 9 27

N=120 d=0 fd = -25 fd=223

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

Assume mean, A=38, then

By inspection, mode lies in the class


36-40.

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

A nsw ers:

X = 36.96 rejects / operator.


= 6.736 rejects / operator.
Mode = 37.70
Coefficient of Skewness = -0.109

Interpretation :
Distribution is Negatively Skewed and
hence the concentration of the
rejects/operator is more on the left side.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Calculation ofBow ley's


coef ci
fient
2) The data on the profits(in Rs lakhs)
earned by 60 companies is as
follows:
Profits Below 10-20 20-30 30-40 40- 50 and
10 50 above
No. of 5 12 20 16 5 2
companies

Obtain the limits of profits of the


central 50 percent companies. And
also calculate Bowleys coefficient of
skewness.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Solution:
Profits (in Rs lakhs) Frequency(f) Cumulative frequency
(c.f)

Below 10 5 5

10-20 12 17

20-30 20 37

30-40 16 53

40-50 5 58

50 and above 2 60

N = 60
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Q1 = size of (N/4)th observation. And


Q3 = size of (3N/4)th observation.
Therefore Q1 = 15th observation, Q3
= 45th observation.

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

Hence, the profit of central 50 percent


companies lies b/w Rs.35 lakhs and
18.33 lakhs.
Therefore, Coefficient of quartile
deviation,
Q.D = (Q3 Q1) / (Q3 + Q1)
=____________

Median=size of (N/2)th observation


=(60/2)th observation. Thus, median
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

Median,

Coefficient of Skewness, SKb = 0.02.

The positive value of SKb indicates that


the distribution in positively skewed.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

A nsw ers:

Q1 = 18.33 lakhs
Q3 = 35 lakhs.
Q.D = 0.313
Median (Me) = 26.5
Coefficient of Skewness = 0.02.

Interpretation:
The distribution is positively skewed and
therefore, concentration of larger value on
the right side of the distribution.
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE
PGDM@IAMEE www.iamee.in

TH E EN D

MEASURNESS OF SKEWNESS AND


INTERPRETATION

THANK YOU

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

go & read
to today
O
otherwise

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE


PGDM@IAMEE www.iamee.in

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The following table gives the distribution of
weekly wages of 500 workers in a factory:

Weekly Below 200- 250- 300- 350- 400


Wages 200 250 300 350 400 and
(Rs). above
No. of 10 25 145 220 70 30
a) Obtain the
Workers limits of income of the central
50% of the observed workers.
b) Calculate Bowley's coefficient of
skewness.
ANS: Negatively Skewed.(SKb = -0.102).
Institute of Advanced Management Education and Entrepreneurship, Hyderabad 2010. IAMEE