Chapter 3 Part 1

Chapter 3
Numerical Descriptive
Measures
Part I
Copyright © 2020 Pearson Education Ltd. Slide 1

Objectives
In this chapter, you learn to:
 Describe the properties of central tendency and

variation in numerical variables.
 Compute descriptive summary measures for a

sample and for a population.

Numerical Descriptive
Measures
1) Measures of Central Tendency.

 Mean, Median, Mode
2) Measures of Variation
 Range, Standard Deviation, Variance, Coefficient of
Variation

Summary Definitions
DCOVA
 The central tendency (or central location) is the
extent to which the values of a numerical variable
group around a typical or central value.
 The variation (or variability) is the amount of

dispersion or scattering away from a central value
that the values of a numerical variable show.
 The shape is the pattern of the distribution of values

from the lowest value to the highest value.
1) Measures of Central Tendency:
The Population Mean µ
DCOVA
 The population mean is the sum of the values in
the population divided by the population size, N.
X i
X1  X 2    XN
 i1

N N
Where μ = population mean
N = population size
Xi = ith value of the variable X
The Sample Mean DCOVA
 The arithmetic mean (often just called the “mean”)

is the most common measure of central tendency.
 For a sample of size n:

Pronounced x-bar
The ith value
n
X i
X1  X 2    Xn
X i1

n n
Sample size Observed values
Example 3.1
 Nutritional data about a sample of seven
breakfast cereals (stored in Cereals.xls)
includes the number of calories per serving:
 Compute the mean number of calories using

Excel.
The Mean (con’t) DCOVA
 The most common measure of central tendency.

 Mean = sum of values divided by the number of values.
 Affected by extreme values (outliers).
11 12 13 14 15 16 17 18 19 20 11 12 13 14 15 16 17 18 19 20
Mean = 13 Mean = 14
11  12  13  14  15 65 11  12  13  14  20 70
  13   14
5 5 5 5

Locating the Median
DCOVA
 The location of the median when the values are in numerical order
(smallest to largest):
n 1
Median position  position in the ordered data
2
 If the number of values is odd, the median is the middle number.
 If the number of values is even, the median is the average of the

two middle numbers.
n 1
Note that is not the value of the median, only the position of
2
the median in the ranked data.

The Median DCOVA
 In an ordered array, the median is the “middle”

number (50% above, 50% below).
11 12 13 14 15 16 17 18 19 20 11 12 13 14 15 16 17 18 19 20
Median = 13 Median = 13
 Less sensitive than the mean to extreme values.

Example 3.2

includes the number of calories per serving
(see Example 3.1).
 Compute the median number of calories in
breakfast cereals using Excel.

The Mode
DCOVA
 Value that occurs most often.
 Not affected by extreme values.
 Used for either numerical or categorical data.
 There may be no mode.
 There may be several modes.
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 0 1 2 3 4 5 6
Mode = 9 No Mode

Example 3.3
 A systems manager in charge of a company’s

network keeps track of the number of server
failures that occur in a day.
 Determine the mode for the following data,
which represent the number of server failures
per day for the past two weeks:
1 3 0 3 26 2 7 4 0 2 3 3 6 3

Review Example
DCOVA
House Prices:  Mean: (QAR 15,000,000/5)
QAR 8,000,000 = QAR 3,000,000
QAR 3,000,000
QAR 2,000,000
 Median: middle value of ranked
QAR 1,000,000 data
QAR 1,000,000 = QAR 2,000,000
Sum QAR
15,000,000  Mode: most frequent value
= QAR 1,000,000

Review Video
https://youtu.be/h8EYEJ32oQ8

Which Measure to Choose?
DCOVA
 The mean is generally used, unless extreme values
(outliers) exist.
 The median is often used, since the median is not
sensitive to extreme values. For example, median
home prices may be reported for a region; it is less
sensitive to outliers.
 In many situations it makes sense to report both the
mean and the median.

Summary
DCOVA
Central Tendency
Arithmetic Median Mode

Mean
n
X i
X i1
n Middle value Most
in the ordered frequently
array observed
value

2) Measures of Variation
Variation DCOVA
Range Variance Standard Coefficient

Deviation of Variation
 Measures of variation give

information on the spread or
variability or dispersion of
the data values.
Same center,
different variation
2) Measures of Variation:
The Range
DCOVA
 Simplest measure of variation.
 Difference between the largest and the smallest values:
Range = Xlargest – Xsmallest
Example:
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Range = 13 - 1 = 12
Example 3.5

(see Example 3.1).
 Compute the range of the number of calories for

the cereals using Excel.

Why The Range Can Be Misleading
DCOVA
 Does not account for how the data are distributed.
7 8 9 10 11 12 7 8 9 10 11 12
Range = 12 - 7 = 5 Range = 12 - 7 = 5
 Sensitive to outliers
1,1,1,1,1,1,1,1,1,1,1,2,2,2,2,2,2,2,2,3,3,3,3,4,5
Range = 5 - 1 = 4
1,1,1,1,1,1,1,1,1,1,1,2,2,2,2,2,2,2,2,3,3,3,3,4,120
Range = 120 - 1 = 119

The Population Variance σ2
DCOVA
 Average of squared deviations of values from
the mean.
N
 Population variance:  (X  μ)
i
2
σ2  i1
N
Where μ = population mean

N = population size
The Sample Variance
DCOVA
 Average (approximately) of squared deviations
of values from the mean.
n
 Sample variance:
 (X i  X) 2
S  2 i 1
n -1
Where X = arithmetic mean
n = sample size
The Population Standard Deviation σ
DCOVA
 Most commonly used measure of variation.
 Shows variation about the mean.
 Is the square root of the population variance.
 Has the same units as the original data.
N
Population standard deviation:
 i 
 2
(X μ)
σ i1
N

The Sample Standard Deviation
DCOVA
 Most commonly used measure of variation.
 Shows variation about the mean.
 Is the square root of the variance.
 Has the same units as the original data.
n
 Sample standard deviation:  (X  X)
i
2
S i1
n -1

The Sample Standard Deviation
DCOVA
Steps for Computing Standard Deviation:
1. Compute the difference between each value and

the mean.
2. Square each difference.
3. Add the squared differences.
4. Divide this total by n-1 to get the sample
variance.
5. Take the square root of the sample variance to
get the sample standard deviation.

Sample Standard Deviation Calculation
Example
DCOVA
Sample
Data (Xi) : 10 12 14 15 17 18 18 24
n=8 Mean = X = 16
(10  X)2  (12  X)2  (14  X)2    (24  X)2
S
n 1
(10  16)2  (12  16)2  (14  16)2    (24  16)2


8 1
130 A measure of the “average”

  4.3095
7 scatter around the mean.
Example 3.6

(see Example 3.1).
 Compute the variance and standard deviation of

the calories in the cereals using Excel.

Comparing Standard Deviations
DCOVA
Data A
Mean = 15.5
11 12 13 14 15 16 17 18 19 20 S = 3.338
21
Data B Mean = 15.5

11 12 13 14 15 16 17 18 19 20
S = 0.926
21
Data C Mean = 15.5

S = 4.567
11 12 13 14 15 16 17 18 19 20 21

Comparing Standard Deviations
DCOVA
Smaller standard deviation
Larger standard deviation

Summary Characteristics
DCOVA
 The more the data are spread out, the greater the
range, variance, and standard deviation.
 The more the data are concentrated, the smaller the

range, variance, and standard deviation.
 If the values are all the same (no variation), all these
measures will be zero.
 None of these measures are ever negative.

Review video
https://youtu.be/E4HAYd0QnRc

The Coefficient of Variation
DCOVA
 Measures relative variation.
 Always in percentage (%).
 Shows variation relative to mean.
 Can be used to compare the variability of two or
more sets of data measured in different units.
 S
CV     100%

X 
Comparing Coefficients of Variation
DCOVA
Both stocks have the

same standard deviation,
but stock B is less
variable relative to its
mean price.

Comparing Coefficients of Variation (con’t)
DCOVA
Stock C has a much smaller

standard deviation but a
much higher coefficient of
variation

Example 3.7

includes the number of calories and the amount
of sugar per serving (in grams).
 Which varies more from cereal to cereal—the
number of calories or the amount of sugar?
 Because calories and the amount of sugar have
different units of measurement, you need to
compare the relative variability in the two
measurements.
Example from real life. 3.7.
Coefficient of variation Coefficient of variation
Calories Sugar  Calories

Mean 130 5.857142857
 CV= (46.9/130)*100=36%.
Standard Error
Median
17.72810521
110
1.280412349
4
 Sugar
Mode 100 4
Standard Deviation 46.9041576 3.38765265
 CV=(3.39/5.86)*100=57.8%.
Sample Variance 2200 11.47619048
Kurtosis -1.061157025 -0.966749884
 Conclusion.
Skewness 0.841173735 0.783416183
Range 120 9
 More variability in the
Minimum
Maximum
80
200
2
11 amount of sugar.
Sum 910 41
Count 7 7

Sample statistics versus
population parameters DCOVA
Measure Population Sample

Parameter Statistic
Mean  X
Variance
2 S2
Standard  S
Deviation
Coefficient of cv = CV =
Variation

.
Statistics versus Parameters

 The parameters (Mean, standard deviations) are
generally unknown.
 We use samples to estimate statistics.
 We use statistics to make inferences about

parameters. (Inferential Statistics)
 We usually use samples instead of populations.

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Chapter 3

Copyright © 2020 Pearson Education Ltd. Slide 1

In this chapter, you learn to:

 Describe the properties of central tendency and

 Compute descriptive summary measures for a

Copyright © 2020 Pearson Education Ltd. Slide 2

1) Measures of Central Tendency.

Copyright © 2020 Pearson Education Ltd. Slide 3

 The variation (or variability) is the amount of

 The shape is the pattern of the distribution of values

 The arithmetic mean (often just called the “mean”)

 For a sample of size n:

 Compute the mean number of calories using

 The most common measure of central tendency.

Copyright © 2020 Pearson Education Ltd. Slide 8

 If the number of values is even, the median is the average of the

Copyright © 2020 Pearson Education Ltd. Slide 9

 In an ordered array, the median is the “middle”

 Less sensitive than the mean to extreme values.

Copyright © 2020 Pearson Education Ltd. Slide 10

 Nutritional data about a sample of seven

Copyright © 2020 Pearson Education Ltd. Slide 11

Copyright © 2020 Pearson Education Ltd. Slide 12

 A systems manager in charge of a company’s

Copyright © 2020 Pearson Education Ltd. Slide 13

Copyright © 2020 Pearson Education Ltd. Slide 14

Copyright © 2020 Pearson Education Ltd. Slide 15

Copyright © 2020 Pearson Education Ltd. Slide 16

Arithmetic Median Mode

Copyright © 2020 Pearson Education Ltd. Slide 17

Range Variance Standard Coefficient

 Measures of variation give

Range = Xlargest – Xsmallest

 Nutritional data about a sample of seven

 Compute the range of the number of calories for

Copyright © 2020 Pearson Education Ltd. Slide 20

Copyright © 2020 Pearson Education Ltd. Slide 21

Where μ = population mean

Copyright © 2020 Pearson Education Ltd. Slide 24

Copyright © 2020 Pearson Education Ltd. Slide 25

1. Compute the difference between each value and

Copyright © 2020 Pearson Education Ltd. Slide 26

(10  16)2  (12  16)2  (14  16)2    (24  16)2

130 A measure of the “average”

 Nutritional data about a sample of seven

 Compute the variance and standard deviation of

Copyright © 2020 Pearson Education Ltd. Slide 28

Data B Mean = 15.5

Data C Mean = 15.5

Copyright © 2020 Pearson Education Ltd. Slide 29

Smaller standard deviation

Larger standard deviation

Copyright © 2020 Pearson Education Ltd. Slide 30

 The more the data are concentrated, the smaller the

 None of these measures are ever negative.

Copyright © 2020 Pearson Education Ltd. Slide 32

Both stocks have the

Copyright © 2020 Pearson Education Ltd. Slide 34

Stock C has a much smaller

Copyright © 2020 Pearson Education Ltd. Slide 35

 Nutritional data about a sample of seven

Calories Sugar  Calories

Copyright © 2020 Pearson Education Ltd. Slide 37