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__________________________________________________

2016

1

Submitted by- Submitted to-

Mohit Agarwal Dr.T.S. Agilla

BC0140037

DECLARATION

I, Mohit Agarwal hereby declare that the project work entitled A STUDY ON MEASURES

OFCENTRAL TENDENCY submitted to Tamil Nadu National Law School; Tiruchirappalli,

is the record of a bonafide work done by me under the supervision and guidance of Prof. Mrs

T.S AGILLA, Faculty of business statistics, Tamil Nadu National Law School;

Tiruchirappalli.

All information furnished in the project is true to the best of my knowledge and belief devoid

of plagiarism. If under the circumstances plagiarism is truly established, then the Law School

may be pleased to proceed with any action against me according to the Universitys rules and

regulations.

Mohit Agarwal

B.Com.,LL.B(H).

2

SUPERVISORS CERTIFICATE

This is to certify that the Project entitled: A Study Of Measures of Central tendency

submitted to the Tamil Nadu National Law School; Tiruchchirappalli, in fulfilment of the

requirements for internal component for B.com; LL.B (HONS.), Third year is a bona-fide

research work carried out by Mohit Agarwal under my supervision and guidance. No part of

this study has been submitted to any University for the award of any Degree or Diploma

whatsoever.

Mrs. Agilla ( )

Date:

Place: Tiruchchirappalli

3

ACKNOWLEDGEMENTS

At the outset, I take this opportunity to thank my Professor T.S AGILLA from the bottom of

my heart who has been of immense help during moments of anxiety and torpidity while the

project was taking its crucial shape.

Secondly, I convey my deepest regards to the administrative staff of TNNLS who held the

project in high esteem by providing reliable information in the form of library infrastructure

and database connections in times of need.

Thirdly, the contribution made by my parents and friends by foregoing their precious time is

unforgettable and highly solicited. Their valuable advice and timely supervision paved the

way for the successful completion of this project. Hence as a student, I am extremely grateful

and forever deeply indebted to him.

4

PREFACE

This project is intended to carry out an extensive research on the given topic by the

supervisor. The material evidence presented in this project is purely based on secondary

sources and also certain standard of textual analysis have been thoroughly detailed. The

research and analysis conducted by the researchers are bona-fide and purely for academic

purposes.

Every effort is made to keep the project error free. I would gratefully acknowledge the

suggestions to improve the project to make it more useful.

5

TABLE OF CONTENTS:

CHAPTER I

INTRODUCTION.8

CHAPTER II

OBJECTIVES.10

METHODOLOGY.....................10

CHAPTER III

MEAN.11

MERITS AND DEMERITS OF

MEAN.14

CHAPTER IV

MEDIAN15

MERITS AND DEMERITS OF

MEDIAN....21

CHAPTER V

MODE.22

MERITS AND DEMERITS OF

MODE.29

CHAPTER VI

CONCLUSION .......................................................31

6

CHAPTER -1

INTRODUCTION

In the study of a population with respect to one in which we are interested we may get a large

number of observations. It is not possible to grasp any idea about the characteristic when we

look at all the observations. So it is better to get one number for one group. That number must

be a good representative one for all the observations to give a clear picture of that

characteristic. Such representative number can be a central value for all these observations.

This central value is called a measure of central tendency or an average or a measure of

locations. There are five averages. Among them mean, median and mode are called simple

averages and the other two averages geometric mean and harmonic mean are called special

averages.1

The meaning of average is nicely given in the following definitions. A measure of

central tendency is a typical value around which other figures congregate.

An average stands for the whole group of which it forms a part yet represents the

whole.

One of the most widely used set of summary figures known as measures of

location.2

CHARACTERISTICS FOR A GOOD OR AN IDEAL AVERAGE :

It should be easy to understand and compute.

It should be based on all items in the data.

Its definition shall be in the form of a mathematical formula.

It should be capable of further algebraic treatment.

It should have sampling stability.

It should be capable of being used in further statistical computations or processing3

Besides the above requisites, a good average should represent maximum characteristics of the

7

data, its value should be nearest to the most items of the given series.

CHAPTER -2

AIMS AND OBJECTIVE

The main objective of this project will be learning of computing of main essential of

computation of central tendency i.e. learning of computing Mean , Median , Mode .

1. Compute Mean

2. Compute Median

3. Compute Mode4

2.2RESEARCH METHODOLOGY

This is the doctrinal research project and the relevant material for this project has been

collected from the primary as well as secondary sources. The doctrinal research is a research

as we all know that it is based on the principles or the Prepositions made earlier. It is more

based on the sources like book in the library, and through various websites. For the purpose

of the said research project the researcher has collected the relevant material from books on

business statistics, central measures of deviation as well as on measures of dispersion.

3 Ibid

4 Supra FN.1.

8

CHAPTER _-3

Arithmetic mean or simply the mean of a variable is defined as the sum of the observations

divided by the number of observations. If the variable x assumes n values x1, x2 ...xn then

the mean, x, is given by5

Short-Cut method :

basis of calculation of deviations from individual values. The formula is

n

xA d

d = the deviation of each value from the assumed mean

Example :

A student s marks in 5 subjects are 75, 68, 80, 92, 56. Find his average mark6

5 Supra FN.1.

9

Solution:

X d=x-A

75 7

A 68 0

80 12

92 24

56 -12

Total 31

d

xA

n

31

= 68 + 5

=

= 68 + 6.2

= 74.2

Grouped Data :

The mean for grouped data is obtained from the following formula:7

x fx

N

where x = the mid-point of individual class

f = the frequency of individual class

N = the sum of the frequencies or total frequencies

Short-cut method :

fd

A c

N

where ,A = any value in x

N = total frequency

C= width of class interval ,

an

d

d x A

c

7 S.P. GUPTA,STATISTICAL METHODS ,Measures of Central Tendency, Chapter 13, module IV,

Statistics

10

Example :

8

Given the following frequency distribution, calculate the arithmetic mean

Marks : 64 63 62 61 60 59

Number of :8 18 12 9 7 6

Solution:

X F Fx d=x-A Fd

64 8 512 2 16

63 18 1134 1 18

62 12 744 0 0

61 9 549 1 9

60 7 420 2 14

59 6 354 3 18

60 3713 -7

Direct method

x fx = 3713 61.88

N 60

Short-cut method

fd 7

x A N = 62 60 = 61.88

8 Ibid

11

MERITS AND DEMERITS OF ARITHMETIC MEAN :

Merits:

1. It is rigidly defined.

2. It is easy to understand and easy to calculate.

3. If the number of items is sufficiently large, it is more accurate and more reliable

4. It is a calculated value and is not based on its position in the series. 9

5. It is possible to calculate even if some of the details of the data are lacking.

6. Of all averages, it is affected least by fluctuations of sampling.

7. It provides a good basis for comparison.

Demerits:

2. It cannot be in the study of qualitative phenomena not capable of numerical measurement i.e.

Intelligence, beauty, honesty etc.,

3. It can ignore any single item only at the risk of losing its accuracy.

6. It may lead to fallacious conclusions, if the details of the data from which it is computed are

not given.

12

CHAPTER -4 MEDIAN

The median is that value of the variety which divides the group into two equal parts, one part

comprising all values greater, and the other, all values less than median.10

Arrange the given values in the increasing or decreasing order. If the number of values are

odd, median is the middle value. If the number of values are even, median is the mean of

middle two values.11

By formula

n 1 th item.

Median = Md =

Example :When odd number of values are given. Find median for the following

Solution:

Arranging the data in the increasing order 8, 10, 18, 20, 25, 27, 30, 42, 53

10 Supra F.N.1

IV, Statistics

13

th

The middle value is the 5 item i.e., 25 is the median Using formula

n 1 th item.

Md =

9 1 th item.

=

10 th

= Item

2

th

= 5 item

= 25

EXAMPLE

The following table represents the marks obtained by a batch of 10 students in

certain class tests in statistics and Accountancy.12

Serial No 1 2 3 4 5 6 7 8 9 10

Marks 53 55 52 32 30 60 47 46 35 28

(Statistics)

Marks 57 45 24 31 25 84 43 80 32 72

(Accountancy)

Indicate in which subject is the level of knowledge higher ?

For such question, median is the most suitable measure of central tendency. The mark in

the two subjects are first arranged in

increasing order as follows:

Serial No 1 2 3 4 5 6 7 8 9 10

Marks in 28 30 32 35 46 47 52 53 55 60

Statistics

Marks in 24 25 31 32 43 45 57 72 80 84

Accountancy

T

n 1 th 10 1 h

Median = 2 item = 2

12 https://statistics.laerd.com/statistical-guides/measures-central-tendency-

mean-mode-median.php

14

item =

5

th th

Value of 5 item value of 6 item

=

= 46 47 = 46.5

Md (Statistics)

2

Md (Accountancy) = 43 45 = 44

2

Grouped Data:

In a grouped distribution, values are associated with frequencies. Grouping can be in the

form of a discrete frequency distribution or a continuous frequency distribution. Whatever

may be the type of distribution , cumulative frequencies have to be calculated to know the

total number of items.

Cumulative frequency : (cf)

Cumulative frequency of each class is the sum of the frequency of the class and the

frequencies of the pervious classes, ie adding the frequencies successively, so that the last

cumulative frequency gives the total number of items

Continuous Series:

The steps given below are followed for the calculation of median in continuous

series.

Step1: Find cumulative frequencies.

N

Step2: Find

2

Step3: See in the cumulative frequency the value first greater than

N

, Then the corresponding class interval is called the Median

2

class. Then apply the formula

Nm

Median = l 2 c

f

Where l = Lower limit of the median class

m = cumulative frequency preceding the median c = width of the median

class

f =frequency in the median class. N=Total frequency.

Note :If the class intervals are given in inclusive type convert them into exclusive type and

call it as true class interval and consider lower limit in this.

15

The following table gives the frequency distribution of 325 workers of a factory, according

to their average monthly income in a certain year.

Income group (in Rs) Number of workers

Below 100 1

100-150 20

150-200 42

200-250 55

250-300 62

300-350 45

350-400 30

400-450 25

450-500 15

500-550 18

550-600 10

600 and above 2

325

Calculate median income

Solution:

Income group Number of Cumulative

(Class-interval) Workers frequency

(Frequency) c.f

Below 100 1 1

100-150 20 21

150-200 42 63

200-250 55 118

250-300 62 180

300-350 45 225

350-400 30 255

400-450 25 280

450-500 15 295

500-550 18 313

550-600 10 323

600 and above 2 325

325

16

N 325

=162.5

2 2

162.5 118 50

Md = 250+

62

= 250+35.89

= 285.8913

Merits of Median :

2. Median can be calculated in case of distribution with open-end intervals.

3. Median can be located even if the data are incomplete.

4. Median can be located even for qualitative factors such as ability, honesty etc. 14

Demerits of Median :

1. A slight change in the series may bring drastic change in median value.

2. In case of even number of items or continuous series, median is an estimated value

other than any value in the series.

3. It is not suitable for further mathematical treatment except its use in mean deviation15.

IV, Statistics

14 Supra.F.N.1

IV, Statistics

17

CHAPTER - 3

MODE

The mode refers to that value in a distribution, which occur most frequently. It is an actual

value, which has the highest concentration of items in and around it.16

The mode of a distribution is the value at the point around which the items tend to be

most heavily concentrated. It may be regarded at the most typical of a series of values.17

It shows the centre of concentration of the frequency in around a given value. Therefore,

where the purpose is to know the point of the highest concentration it is preferred. It is,

thus, a positional measure.18

Its importance is very great in marketing studies where a manager is interested in

knowing about the size, which has the highest concentration of items. For example, in

placing an order for shoes or ready-made garments the modal size helps because this sizes

and other sizes around in common demand

IV, Statistics

17 Ibid

18 Supra F.N.1

18

Computation of the mode

For ungrouped data or a series of individual observations, mode is often found by

mere inspection.19

Example

In some cases the mode may be absent while in some cases there may be more than

one mode.20

Grouped Data:

For Discrete distribution, see the highest frequency and corresponding value of X is mode.

Continuous distribution :

See the highest frequency then the corresponding value of class interval is called the modal

class. Then apply the formula.

1

Mode = M 0 = l + C

1+ 2

1 = f1-f0 2 =f1-f2 f1 =

frequency

of the modal class

f0 = frequency of the class preceding the modal class f 2 = frequency of the class

succeeding the modal class

The above formula can also be written as

0

Mode = l + f1 -f

IV, Statistics

20 Ibid

19

c

2f 1 - f 0 - f 2

1. If (2f1-f0-f2) comes out to be zero, then mode is obtained by the following formula

taking absolute differences within vertical lines.

2. M0= l + ( f1 f0 )

c

| f1 f 0 | | f1 f2 |

If mode lies in the first class interval, then f0 is taken a zero

The computation of mode poses no problem in distribution with open - end classes ,

unless the modal value lies in the open -end class.21

.Example :

Calculate mode for the following :

C- I f

0-50 5

50-100 14

100-150 40

150-200 91

200-250 150

250-300 87

300-350 60

350-400 38

400 and above 15

Solution:

The highest frequency is 150 and corresponding class interval is 200 250, which is the

modal class.

Here,

l=200,

f1=150,

f0=91,

f2=87,

C=50

Mode = M0 = l + f1 -f0 c

IV, Statistics

20

2f 1 - f 0 - f 2

200

= 150-91 50

2 150 91 87

=200+24.18

=224.1822

For a frequency distribution modal class corresponds to the maximum frequency. But

in any one (or more) of the following cases

i. If the maximum frequency is repeated

ii. If the maximum frequency occurs in the beginning or at the end of the distribution

iii. If there are irregularities in the distribution, the modal class is determined by the

method of grouping.23

Steps for Calculation :

1. In column I, we write down the given frequencies.

2. Column II is obtained by combining the frequencies two by two.

st

3. Leave the 1 frequency and combine the remaining frequencies two by two and

write in column III

4. Column IV is obtained by combining the frequencies three by three.

5. Leave the 1st frequency and combine the remaining frequencies three by three and

write in column V

nd

6. Leave the 1st and 2 frequencies and combine the remaining frequencies three by

three and write in

column VI24

Mark the highest frequency in each column. Then form an analysis table to find the

modal class. After finding the modal class use the formula to calculate the modal value.

22 S.P. GUPTA,STATISTICAL METHODS ,Measures of Central Tendency, Chapter 13, module

IV, Statistics

23 Supra F.N.1

IV, Statistics

21

Example:

Calculate mode for the following frequency distribution

Interval 5 10 15 20 25 30 35 40

Frequency 9 12 15 16 17 15 10 13

Grouping Table

CI f 2 3 4 5 6

0- 5 9

5-10 12 21 36

27

10-15 15 43

15-20 16 31 48

20-25 17 33 48

32

25-30 15 42 38

30-35 10 25

23

35-40 13

Analysis Table

1 1

2 1 1

3 1 1

4 1 1 1

5 1 1 1

6 1 1 1

Total 1 2 4 5 2

The maximum occurred corresponding to 20-25, and hence it is the modal class.

1 C

Mode = Mo = l + 1 +2

Here l = 20; 1 = f1 f0 = 17 16 = 1

= f1f2 = 17 15 = 2

2

M0 = 20 + 1 5

12

= 20 + 1.67 = 21.6725

Merits of Mode:

1. It is easy to calculate and in some cases it can be located mere inspection

25 Ibid

22

2. Mode is not at all affected by extreme values.

3. It can be calculated for open-end classes.

4. It is usually an actual value of an important part of the series.

5. In some circumstances it is the best representative of data.

Demerits of mode:

1. It is not based on all observations.

2. It is not capable of further mathematical treatment.

3. Mode is ill-defined generally, it is not possible to find mode in some cases.

4. As compared with mean, mode is affected to a great extent, by sampling

fluctuations.

It is unsuitable in cases where relative importance of items has to be considered

CONCLUSION

Statistics has become indispensable in all phases of human endeavour. In business world,

Statistical methods are playing an ever-increasing role in framing suitable polices. Statistics is

concerned with scientific methods for collecting, organising, summarising, presenting and

analysing data as well as deriving valid conclusions and making reasonable decisions on the

basis of this analysis. Statistics is concerned with the systematic collection of numerical data

and its interpretation. A measure of central tendency is a single value that attempts to describe

a set of data by identifying the central position within that set of data. As such, measures of

central tendency are sometimes called measures of central location. They are also classed as

summary statistics. The mean (often called the average) is most likely the measure of central

tendency that you are most familiar with, but there are others, such as the median and the

mode

23

Thus , we conclude that the mean, median and mode are all valid measures of central

tendency, but under different conditions, some measures of central tendency become more

appropriate to use than others. In the following sections, we will look at the mean, mode and

median, and learn how to calculate them and under what conditions they are most appropriate

to be used.

BIBLIOGRAPHY

BOOKS REFERRED:

2. Dr. B N Gupta: Statistics (Sahityta Bhavan), Agra.

3. S.C Gupta: Business Statistics, Himalaya Publishing House.

4. Levin, Richard and David S. Rubin. Statistics for Management. 7th Edition.

Prentice Hall of India.

5. Siegel, Andrew F. Practical Business Statistics. International Edition. (4th Ed.). Irwin

McGraw Hill.

6. Berenson and Levine. Basic Business Statistics: Concepts and Applications. Prentice Hall.

24

7. Spiegel M.D. Theory and Problems of Statistics. Schaums Outlines Series. McGraw Hill

Publishing Co.

WEBLIOGRAPHY

www.Jstor.org

www.heinonline.com

www.legalservicesindia.com

www.wikipedia.com

25

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