CLASS 11-HUMANITIES . ECONOMICS . STATISTICS FOR ECONOMICS . MEASURES OF-CENTRAL-TENDENCY
Chapter 5 : Measures of Central Tendency
Ch 5
ECONOMICS
CLASS 11-HUMANITIES
Measures of Central Tendency: Arithmetic Mean
Concept Explanation: Arithmetic Mean is the average of a set of numbers, calculated by dividing the sum of all observations by the total number of observations. It represents a central value of the data set.
Key Definitions / Features:
- Mean: \( \bar{x} = \frac{\sum x}{N} \), where \(x\) are observations and \(N\) is the number of observations.
- Objectives of Statistical Average: To summarize data, facilitate comparison, infer about population from sample, trace mathematical relationships, and aid decision making.
- Essentials of a Good Average: Rigidly defined, representative, easy to understand, stable against sampling fluctuations, absolute number, algebraically treatable, unaffected by extreme values, and easy to compute.
- Kinds of Statistical Average: Mathematical Averages and Positional Averages.
- Types of Arithmetic Mean: Simple Arithmetic Mean, Weighted Arithmetic Mean, Combined Mean.
Methods of Calculating Simple Arithmetic Mean:
For Individual Data Series:
- Direct Method: \( \bar{x} = \frac{\sum x}{N} \)
- Shortcut Method: Choose an assumed mean \(A\), calculate deviations \(dx = x - A\), then \( \bar{x} = A + \frac{\sum dx}{N} \)
- Step Deviation Method: Choose a common factor \(C\), calculate \( d' = \frac{x - A}{C} \), then \( \bar{x} = A + \frac{\sum d'}{N} \times C \)
For Discrete Series:
- Direct Method: \( \bar{x} = \frac{\sum f x}{\sum f} \), where \(f\) is frequency.
- Shortcut Method: \( \bar{x} = A + \frac{\sum f dx}{\sum f} \)
- Step Deviation Method: \( \bar{x} = A + \frac{\sum f d'}{\sum f} \times C \)
For Continuous Series:
- Calculate mid-values of class intervals.
- Apply Direct, Shortcut, or Step Deviation methods similarly using mid-values and frequencies.
Calculation in Cumulative Frequency Distribution: Convert cumulative frequency to normal frequency distribution and apply any of the above methods.
Combined Arithmetic Mean:
For two groups with means \( \bar{x}_1, \bar{x}_2 \) and sizes \( N_1, N_2 \):
\[ \bar{x} = \frac{N_1 \bar{x}_1 + N_2 \bar{x}_2}{N_1 + N_2} \]
Weighted Arithmetic Mean:
When items have different importance, weights \(W\) are assigned:
\[ \bar{x}_w = \frac{\sum W x}{\sum W} \]
Properties of Arithmetic Mean:
- Mean changes proportionally if all observations are increased, decreased, multiplied, or divided by a constant.
- Sum of deviations from the mean is zero.
- Sum of squared deviations from the mean is minimum compared to any other value.
Illustrative Example:
Calculate the mean of data: 5, 7, 9, 10, 12 using Direct Method.
\[ \bar{x} = \frac{5 + 7 + 9 + 10 + 12}{5} = \frac{43}{5} = 8.6 \]
Practice Set:
- Level 1: Find the arithmetic mean of 3, 6, 9, 12.
- Level 2: Calculate the weighted mean of marks where weights are credits.
- Level 3: Given two groups with means and sizes, find combined mean.
Answer Key:
- Level 1: Mean = (3+6+9+12)/4 = 7.5
- Level 2: Use formula \( \bar{x}_w = \frac{\sum W x}{\sum W} \)
- Level 3: Use combined mean formula.
Quick Reference: Arithmetic Mean formulas and methods summarized above.
Glossary:
- Mean: Average value.
- Frequency (f): Number of occurrences.
- Assumed Mean (A): Reference value for shortcut methods.
- Step Deviation (d'): Scaled deviation for simplification.
Measures of Central Tendency: Median (M)
Concept Explanation: Median is the middle value in an ordered data set that divides the data into two equal halves.
Key Definitions / Features:
- Median: The value at position \( \frac{N+1}{2} \) for odd \(N\), or average of values at positions \( \frac{N}{2} \) and \( \frac{N}{2} + 1 \) for even \(N\).
- Merits: Easy to calculate, unaffected by extreme values, certain, suitable for qualitative data, graphical representation possible.
- Demerits: Requires data ordering, lacks algebraic treatment, less representative, affected by sampling.
Calculation Methods:
Individual Series: Arrange data in order and find middle value(s) as per odd/even count.
Discrete Series: Use cumulative frequency and formula:
\[ \text{Median} = L + \left( \frac{\frac{N}{2} - F}{f} \right) \times h \]
Where:
- \(L\) = lower boundary of median class
- \(N\) = total frequency
- \(F\) = cumulative frequency before median class
- \(f\) = frequency of median class
- \(h\) = class width
Continuous Series: Convert inclusive to exclusive series, find cumulative frequency, then apply above formula.
Graphic Method: Median can be found using ogive (cumulative frequency curve) by locating \( \frac{N}{2} \) on frequency axis and projecting to data axis.
Other Partition Values: Quartiles, deciles, and percentiles divide data into more parts.
Illustrative Example:
Find median of data: 3, 5, 7, 9, 11.
Ordered data count \(N=5\) (odd), median position = \( \frac{5+1}{2} = 3^{rd} \) value = 7.
Practice Set:
- Level 1: Find median of 2, 4, 6, 8, 10.
- Level 2: Calculate median for grouped data using formula.
- Level 3: Determine median graphically from ogive.
Answer Key:
- Level 1: Median = 6
- Level 2: Apply formula with given frequencies.
- Level 3: Use ogive to find median value.
Quick Reference: Median formulas and steps summarized above.
Glossary:
- Median Class: Class interval containing median.
- Cumulative Frequency (F): Sum of frequencies up to a class.
- Class Width (h): Difference between upper and lower class boundaries.
Measures of Central Tendency: Mode (Z)
Concept Explanation: Mode is the value that occurs most frequently in a data set.
Key Definitions / Features:
- Mode: Observation with highest frequency.
- Calculated by inspection in individual series.
- For discrete and continuous series, use Grouping and Analysis Table to identify modal class.
Grouping and Analysis Table: Six columns are prepared to analyze frequencies in pairs and groups to identify modal class.
Mode Formula for Continuous Series:
\[ \text{Mode} = L + \left( \frac{f_1 - f_0}{2f_1 - f_0 - f_2} \right) \times h \]
Where:
- \(L\) = lower limit of modal class
- \(f_1\) = frequency of modal class
- \(f_0\) = frequency of class preceding modal class
- \(f_2\) = frequency of class succeeding modal class
- \(h\) = class width
Illustrative Example:
Given class intervals and frequencies, identify modal class and calculate mode using formula.
Practice Set:
- Level 1: Identify mode from individual data.
- Level 2: Use grouping table to find modal class.
- Level 3: Calculate mode for grouped data using formula.
Answer Key:
- Level 1: Mode is the value with highest frequency.
- Level 2: Prepare grouping table and identify modal class.
- Level 3: Apply mode formula with given frequencies.
Quick Reference: Mode calculation steps and formula summarized above.
Glossary:
- Modal Class: Class interval with highest frequency.
- Grouping Table: Frequency analysis tool to identify mode.
Key Words
- Average: A single value representing the entire data set, located centrally.
- Arithmetic Mean: Sum of observations divided by number of observations.
- Median: Middle value dividing data into two equal parts.
- Quartiles: Values dividing data into four equal parts.
- Mode: Most frequently occurring value in data.
ECONOMICS — ALL CHAPTERS
1
Introduction
2
Theory of Consumer Behaviour
3
Production And Costs
4
The Theory Of The Firm Under Perfect Competition
5
Market Equilibrium
1
Introduction
2
Collection of Data
3
Organizing of Data
4
Presentation of Data
5
Measures of Central Tendency
6
Correlation
7
Index Numbers
8
Use of Statistical Tools