Measures of central tendency

A measure of central tendency is a typical

value around which other figures concentrate.
An average is a single value within the range
of the data that is used to represent all the
values in the series.
Objectives of an average
It reduces the mass information into a single
value.
Average provides facility to make
comparisons.
Average is very useful in statistical analysis.
Average is also used in sampling. We can get a
clear picture of a group or population by the
help of a sample.
Types of Averages
Arithmetic Mean
Median
Mode
Arithmetic Mean
It is defined as the sum of the observations
divided by the number of observations.
It is denoted by x
1. Individual Series
(i) Direct Method


where,
x denotes the value of the
variable
n denotes the number of
observations.
(ii) Short Cut Method


where,
A is assumed mean
n denotes number of
terms.

= x
n
x
1

= + = A x d d
n
A x ;
1
Ques 1. The number of new orders received by a company over the last 25
working days were recorded as follows:

3, 0, 1, 4, 4, 4, 2, 5, 3, 6, 4, 5, 1, 4, 3, 2, 0, 2, 0, 5, 4, 2, 3, 3, 1.

Calculate the average number of orders received over all similar working days.
Ques 2. The following data gives the equity holdings of 10 of the Indias
billionaires.
















Calculate the average equity holding.

Name Equity Holdings(millions of Rs)
Kiran Mazumdar-Shaw 2717
The Nilekani family 2796
The punj family 3098
Karsanbhai K. Patel 3144
Shashi Ruia 3527
K.K.Birla 3534
B.Ramalinga Raju 3862
Habil F. Khorakiwala 4187
The Murthy family 4310
Keshub Mahindra 4506
2. Discrete Series
(i) Direct Method


where,
x denotes the values of
the variable
f denotes the frequency
N = f ; denotes the no.
of observations.
(ii) Short Cut Method


where,
d = x - A
A is assumed mean
N = f ; denotes the no. of
terms

= x f
N
x
1

+ = d f
N
A x
1
Ques 1. The HR manager at a city hospital began a study of the overtime hours of
the registered nurses. The following data was recorded during a month.















Calculate the arithmetic mean of overtime hours during the month.

Overtime
hours
No. of
nurses
5 3
6 4
7 2
9 4
10 2
12 5
13 3
15 2
Ques 2. The following are the figures of profits earned by 1,400 companies
during 2008-2009.













Calculate the average profit for all the companies.

Profits(Rs.
Lakhs)
No. of
companies
300 500
500 300
700 280
900 120
1100 100
1300 80
1500 20
3. Continuous Series
(i) Direct Method:


where,
x denotes the mid point of various class
interval
f denotes the frequency of each class
N = f ; denotes the total frequency

= x f
N
x
1
(ii) Short Cut Method:


where,
d = x A
x denotes the mid point of various class interval
A is assumed mean
f denotes the frequency of each class
N = f ; denotes the total frequency

+ = d f
N
A x
1
(iii) Step Deviation Method:


where,
u = (x - A)/h
h denotes the width of class interval
A is assumed mean
N = f ; denotes the no. of terms

+ = h u f
N
A x
1
Ques 1. Calculate mean for the following frequency table:


Weekly rent No. of persons
paying rent
200-400 6
400-600 9
600-800 11
800-1000 14
1000-1200 20
1200-1400 15
1400-1600 10
1600-1800 8
1800-2000 7
Ques 2. In an examination of 670 candidates the examiner supplied the following
information:

Marks obtained

No. of
candidates
0 10 7
10 20 32
20 30 56
30 40 106
40 50 175
50 60 164
60 70 86
70 80 44
Ques. Six types of workers are employed in each of two workshops but at different
rates of wages as follows:













In which of the two workshops is the average rate of wages per worker higher and
by how much?


Workshop A
Daily wages
per worker
No. of
workers
Workshop B
Daily wages
No. of
workers
per worker
92.50 2 93.00 11
93.50 14 93.25 50
94.00 20 93.50 8
93.00 7 94.25 10
94.25 6 94.50 10
94.50 1 95.00 2
Ques. Calculate mean from the following data pertaining to the profits(in crore
Rs.) of 125 companies:

Profits(Rs. crore)
(less than)
No. of companies
10 4
20 16
30 40
40 76
50 96
60 112
70 120
80 125
Merits & Demerits
Merits
All values are used
It has unique value & easy to calculate
The sum of the deviations from the mean is 0
Demerits
The mean is affected by extreme values
E.g., average salary at a company
12,000; 12,000; 12,000; 12,000; 12,000; 12,000;
12,000; 12,000; 12,000; 12,000; 20,000; 390,000
Mean = $44,167
It is not suitable for open end classes




MEDIAN
The median is the measure of central tendency
which appears in the middle of an ordered
sequence of values. That is, half of the
observations in a set of data are lower than it
and half of the observations are greater than
it.
1. Individual Series
Arrange the data in increasing or decreasing
order.
Median is given by:

Median=
term th
n
2
) 1 ( +
Questions:
1. From the following data of wages of 7 workers, compute
the median wage:
2600, 2650, 2580, 2690, 2660, 2606, 2640
2. Discrete Series
Calculate the cumulative frequency.
Find (N+1)/2th term.
Select the cumulative frequency in which that
value lies.
The value of the variable corresponding to
that cumulative frequency is the median.
2. Calculate the median for following data:


X f
45 10
55 20
65 20
75 15
85 15
95 20
3. Continuous Series
Calculate the cumulative frequency.
The value corresponding to N/2th term gives the median class.
Then median is calculated by the formula:


erval class of width h
class median the
preceeding class the of f requency cumulative cf
class median the of f requency f
class median the of it lower l
where
h cf
N
f
l Median
int
lim
,
2
1
=
=
=
=

|
.
|

\
|
+ =
3. Calculate the median for following data:


Class interval Frequency
10 - 15 11
15 20 20
20 25 35
25 30 20
30 35 8
35 - 40 6
4. Calculate the median from the following data pertaining to the profits (in crore
Rs.) of 125 companies:

Profits (less than) No. of companies
10 4
20 16
30 40
40 76
50 96
60 112
70 120
80 125
Merits
Median is unique
Median is less affected by extreme values as compared to
mean
It can be used for openend distribution
Graphical presentation of median is possible
Median is used for studying qualitative attributes
Demerits
For median, it is necessary to arrange the data
It is not capable for further algebraic treatment
It does not use each and every observation of the data set

Mode
The most frequent score in the distribution.

A distribution where a single score is most frequent has one mode
and is called unimodal.

A distribution that consists of only one of each score has n modes.

When there are ties for the most frequent score, the distribution is
bimodal if two scores tie or multimodal if more than two scores
tie.
Mode (cont)
2
2
3
3
4
4
4
4
4
10
Number of Words Recalled in Performance Study
The mode is 4.
Mode (cont)
72 72 73 76 78
81 83 85 85 86
87 88 90 91 92
This distribution is bimodal.
1. Individual Series:

In Individual series we guess mode by inspection. We observe that term in the
series which occurs maximum number of times. This term is called mode.

2. Discrete Series:

In discrete series mode is that value of variable whose frequency is maximum.

3. Continuous Series:

The class interval that is corresponding to the maximum frequency is the modal
class. Then mode is calculated by the formula:


class al of width h
class al the suceeding class of f requency f
class al preceeding class of f requency f
class al of f requency f
class al of it lower l
where
h
f f f
f f
l z
mod
mod
mod
mod
mod lim
,
2
2
0
1
2 0 1
0 1
=
=
=
=
=

+ =

Ques 1. Find the mode of following data:


Class Frequency
0 5 29
5 10 195
10 15 241
15 20 117
20 25 52
25 30 10
30 35 6
35 40 3
40 45 2
Ques 2. Find the mode of following data:


Class Frequency
0 10 5
10 20 15
20 30 20
30 40 20
40 50 32
50 60 14
60 70 14
70 80 5
Merits of Mode:

It is easy to understand. Sometimes it is found only by inspection.
It is least affected by extreme values.
It can also be located graphically.
It is also useful when items related to fashion are considered.



Demerits of Mode:

It is not based on all the observations.
Equal intervals are needed for the calculation of mode.
Empirical relation between mean,
median and mode
The relationship between arithmetic mean, median and mode is
given by following formula:

Mode = 3 Median 2 Mean
Ques 1. Find out an estimate of mode, when mean and median are 12 and 16.5


Ques 2. If mean = 26, mode = 28.5. Find an estimate of median.