Measures of Central Tendency

A questionnaire design is dependent on the analysis required from it. The analysis can be performed
based on the types of measurement used in the questionnaire.

The following are the various scale of measurements. They are:

1. Nominal

2. Ordinal

3. Interval

4. Ratio

Nominal Scale:

In nominal scale, numbers are used as labels and have no numerical sanctity. For example, if we
want to categorise male and female respondents. We can use a nominal scale of 1 for male and 2 for
female. But 1 and 2 do not represent any distance or order. We can assign female as 1 and male as 2
and it could be a nominal scale.

We can use the nominal scale to indicate categories of any variable which is not given a numerical
significance. For illustration, demographic variables such as religion, educational level and language
spoken are normally scaled.

Nominal scaled variables cannot be used to perform many of the statistical tools such as mean,
standard deviation and so on, because such results do not have any meaning when used with
nominal scale variables. The chi-square test can be performed on a cross-tabulation, of nominal
scale data. Simple tabulations, cross tabulations can be done with such numerical scale data.

Ordinal Scale:

Ordinal scale variables are ones which have a meaningful order of them. Ranks are given to options
by the respondents. Rank 1 means it is ranked higher than rank 2. Similarly rank 2 is higher than rank
3 and so on. We cannot measure the distance between 1 and 2, 2 and 3 and so on.

The statistics which can be used with the ordinal scale are the median, various percentiles such as
quartiles and spearman rank correlation. Average or Arithmetic mean cannot be used on the ordinal
scale of variables.

Interval Scale

Most of the behavioural measurements scales used to measure attitudes of respondents on a scale
of 1 to 5 or 1 to 7 or 1 to 10 can be treated as interval scales. This type of scale is also called as rating
scales. We can calculate average and standard deviation for the responses using interval scale. The
difference between 1 and 2 is the same distance between 2 and 3.

Ratio Scale
All the arithmetic operations are possible for ratio-scaled variable. Average, standard deviation,
Correlation, t-test and F-test can be performed for this type of scaled data.

Measures of Central Tendency

The main objective of statistical analysis is to get one single value that describes the characteristic of
the entire mass of un widely data. Such a value is called the central value or an average or the
expected value of the variable. For example average marks in a class etc.

According Clark, “Average is an attempt to find one single figure to describe whole of figures”

Types of Averages

The following are the important types of averages:

 Arithmetic mean (i) Simple and (ii) Weighted

 Median
 Mode
 Geometric Mean
 Harmonic Mean

Arithmetic Mean

The process of computing mean in case of individual observations (i.e. where frequencies are not
given) is very simple. Add together the various values of the variable and divide the total by the
number of items.

X = X1 + X2+ X3+…..+ Xn/N or X = ∑X/N

X = Arithmetic Mean, ∑X = Sum of all the values of the variable X i.e X1, X2, …….. Xn, N = number of
observations.

Forms of Data

There are 3 forms of Data:

 Individual observation

 Discrete Series

 Continuous series

The following are the examples for different forms of data:

 Individual Observation

The monthly Income of 5 employees are Rs.5,000, Rs.6,000, Rs.7,000, Rs.8,000 and Rs.9,000

 Discrete Series

Monthly Income (Rs.) No. of Employees

 5,000 6

6,000 8

7,000 9

8,000 7

 Continuous series

Monthly Income (Rs.) Number of employees

5,000 - 10,000 8

10,000 - 15,000 6

15,000 – 20,000 9

1. The following data gives value of net worth of the top 10 world richest billionaires:

Name Source of Wealth NETWORTH (Billion)

Carlos Slim Helu & family Telecom 73

Bill Gates Microsoft and Investments 67

Amancio Ortega Zara 57

Warren Buffett Berkshire Hathaway 53.5

Larry Ellison Oracle 43

Name Source of Wealth NETWORTH (Billion)

Charles Koch Diversified 34

David Koch Diversified 34

Li Ka-shing Diversified 31

Liliane Bettencourt L'Oreal 30

Bernard Arnault LVMH 29

Source: https://www.forbes.com/sites/edwindurgy/2013/03/04/the-worlds-richest-billionaires-full-
list-of-the-top-500/#4cd1ad262504

Calculate Mean for the above data

Mean X = ∑X/N = 451.5/10 = 45.15 billions

Where N – Number of observations

 Short Cut Method

X d = X-A

73 39

67 33

57 23

53.5 19.5

43 9

34 0

34 0

31 -3
 30 -4

29 -5

---------

∑d 111.5

Ascending order 29, 30, 31, 34, 34, 43, 53.5, 57, 67, 73

Assumed mean = 10 observations/2 = 5th observation = 34

 Short Cut Method

X = A + (∑d/N)

= 34 + (111.5/10)

= 45.15 billions

 Calculate Mean for the following data:

Monthly Income Number of Employees

5000 8

6000 7

7000 6

8000 9

9000 10

Monthly Income (X) No. of Employees(f) fX

5000 8 40000

6000 7 42000

7000 6 42000

8000 9 72000

9000 10 90000

---------- ----------

Total 40 2,86000
 Mean X = ∑ fX / N = 2,86,000/40 = Rs.7150

N – Sum of the frequencies = ∑f = 40

 Short Cut Method and Step deviation Method

X = A + (∑fd/N)*i

Here N = ∑f and d=(X-A)/i

X f d=(X-A)/i fd

5000 8 -2 -16

6000 7 -1 -7

7000 6 0 0

8000 9 1 9

9000 10 2 20

---- ----

40 6

Short Cut Method

X = A + (∑fd/N)*i = 7000 + (6/40)*1000

= Rs.7150

Here N = ∑f

Monthly Income Number of Employees

5,000 - 10,000 6

10,000 - 15,000 7

15,000 - 20,000 9

20,000 - 25,000 4

25,000 – 30,000 5

X f m fm
 5,000 - 10,000 6 7500 45000

10,000 - 15,000 7 12500 87500

15,000 - 20,000 9 17500 157500

20,000 - 25,000 4 22500 90000

25,000 – 30,000 5 27500 137500

--- ---------

31 517500

X = ∑fm/N = 517500/31 = Rs.16693.55

Here N = ∑f

 Short Cut Method

X = A + (∑fd/N)

where d = (m-A/i)

X f m d = (m-A)/I fd

5,000 - 10,000 6 7500 -2 -12

10,000 - 15,000 7 12500 -1 -7

15,000 - 20,000 9 17500 0 0

20,000 - 25,000 4 22500 1 4

25,000 – 30,000 5 27500 2 10

--- ----

31 -5

 Short Cut Method and Step Deviation Method

X = A + (∑fd/N)

where N = ∑f and d = (m-A/i)

= 17500 + (-5/31)*5000

= 17500 – (25000/31)
 = 17500 – 806.45 = 16693.55

Median

 In certain circumstances, mean is not an appropriate measure of location in most of the

business applications, there are situations that have extreme values either on lower side or
on higher side.

 For example, if the data comprises of values 1,7,9,10, then the mean value is 6.75 which may
not be considered as a representative of the data as three out of four values are more than
the value.

 Moreover, sometimes exact values may not available at either end of the range of values.
For example the flat areas of 5 houses are less than 500 sqft, 600 sqft, 700 sqft, 800sqft and
900sqft. In this case a calculation of Arithmetic Mean is not possible.

 Hence, whenever there are some extreme values in the data, calculations of A.M is not
desirable. Moreover, whenever the exact values of some observations are not available, A.M
can not be calculated. In these cases, Median is the best measure to be used for analysis.

Median – Individual Observation – Even number of Observations

The following data gives value of net worth of the top 10 world richest billionaires:

73

67

57

53.5

43

34

34

31

30

29

Calculate Median for the above data.

Always, write the values in ascending order

29,30,31,34,34,43,53.5,57,67,73

 Median = (N+1)/2 th observation

 = (10+1)/2 th observation

= 5.5th observation

= (5th observation + 6th observation )/2

= (34+43)/2

= 38.5 billions

Hence the median net worth of 10 billionaires is $38.5 billions

It may be noted that 5 billionaires have net worth less than this value and 5 billionaires have net
worth more than this value.

Median – Individual Observation – 0dd number of Observations

 The following data gives value of net worth of the top 9 world richest billionaires:

73

67

57

53.5

43

34

34

31

30

The ascending order of the values are

30,31,34,34,43,53.5,57,67 and 73

 Median = (N+1)/2th observation

= (9+1)/2th observation

= 5th observation

= 43 billions

Hence the median net worth of 9 billionaires is $43 billions

It may be noted that 4 billionaires have net worth less than this value and 4 billionaires have net
worth more than this value.

Problem in Median Discrete Series

Monthly Income (X) No. of Employees(f) cf

5000 8 8

6000 7 15 (8+7)

7000 6 21

8000 9 30

9000 10 40

----------

Total 40

Median = (N+1)/2 th observation

= (40+1)/2 th observation

= 20.5th observation

= Rs.7000

Median – Continuous Series

Monthly Income Number of Employees

5,000 - 10,000 6

10,000 - 15,000 7

15,000 - 20,000 9

20,000 - 25,000 4

25,000 – 30,000 5

X f cf

5,000 - 10,000 6 6

10,000 - 15,000 7 13

15,000 - 20,000 9 22

20,000 - 25,000 4 26
 25,000 – 30,000 5 31

Median = L+((N/2-cf)/f)*I

N/2 = ∑f/2 = 15.5

L = 15,000

f=9

Cumulative frequency (cf) = 13

i=size of the class interval = 5,000

Median = 15,000 + ((15.5-13)/9)*5,000

= 15,000 + 1388.89 = Rs.16,388.89

Hence the median income of 31 employees is Rs.16,388.89

It may be noted that 15 employees have income less than this value and 15 employees have
income more than this value

Mode Individual Observation

 The value that is repeated the most often in a data set is mode.

Find the mode for the following data:

The size of nine garment is as follows:

30, 31, 32, 33, 34, 32, 33, 32, 30

Here 32 repeated maximum number of time and hence mode is 32.

Mode- Discrete Series

A survey was taken to find the number of cars in a house in the first street of Ram Nagar. The
results of the survey is shown in the form of frequency distribution in the following table. Find
the mode for the following data.

Number of cars in a house: 0 1 2 3 4

Number of houses : 5 12 7 4 2

Mode = 3 Median – 2 Mean

X f fX cf Mode = 3 Median – 2 Mean

0 5 0 5 Median = (N+1)/2 th observation

1 12 12 17 = (30+1)/2 th observation

2 7 14 24 = 15.5th observation
3 4 12 28 =1

4 2 8 30 Hence Mode of maximum number

--- --- of cars in a house in the first street is

30 46 ‘1’

Find the mode for the following data:

Class : 0-10 10-20 20-30 30-40 40-50 50-60

Frequency: 8 11 14 7 9 6

Mode = L +( ∆1/ ∆1+ ∆2)*i

∆1 – the difference between the highest frequency and preceeding frequency i.e 14-11 = 3

∆2 -the difference between the highest frequency and succeeding frequency i.e 14 -7 = 7

L – Lower limit of the Modal class = 20

i- size of the class interval = Upper limit – lower limit of the class = 10

Substituting these values in the following formula, we get

Mode = L +(( ∆1/ (∆1+ ∆2))*i

= 20 + (3/10)*10

= 23