Ahram Canadian University Third Level – All major

School of Business Administration Statistics

Dr. Hesham Tolba

Measures of Central Tendency

According to Prof. Bowley “Measures of central tendency
(averages) are statistical constants which enable us to
comprehend in a single effort the significance of the whole.”
The main objectives of Measure of Central Tendency are
1. To condense data in a single value.
2. To facilitate comparisons between data.
There are different types of averages, each has its own
advantages and disadvantages.

Requisites of a Good Measure of Central Tendency:

1. It should be rigidly defined.
2. It should be simple to understand & easy to calculate.
3. It should be based upon all values of given data.
4. It should be capable of further mathematical treatment.
5. It should have sampling stability.
6. It should be not be unduly affected by extreme values.

Measures of Central Tendency

Mathematical Locational (positional )

Average average

Arithmetic
Mode Median
Mean

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

1- Arithmetic Mean
This is what people usually intend when they say "average"

The mean of a sample or a population is computed by adding all

of the observations and dividing by the number of observations.

Ex.1

Suppose we draw a sample of five women and measure their

weights. They weigh 100 pounds, 100 pounds, 130 pounds, 140
pounds, and 150 pounds.

For the five women, the mean weight would equal (100 + 100 +
130 + 140 + 150)/5 = 620/5 = 124 pounds.

In general, the mean can be calculated, using one of the

following equations:
Population mean:: If 𝒙𝟏 , 𝒙𝟐 , …., 𝒙𝑵 are data represent all
values of population then arithmetic mean is given by:
∑𝑵
𝟏 𝒙𝒊
𝝁=
𝑵
 The value of the population mean  is constant
Sample mean: If 𝒙𝟏 , 𝒙𝟐 , …., 𝒙𝒏 are sample data values then
arithmetic mean is given by:
𝒙𝟏 +𝒙𝟏 +⋯……+𝒙𝒏 ∑𝒏
𝟏 𝒙𝒊
̅=
𝒙 =
𝒏 𝒏

 The value of the sample, x varies from sample to sample

where :

 x is the variable under study,

 N is the number of population observations;
 n is the number of sample observations.
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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

Frequency Distribution:
Let 𝒙𝟏 , 𝒙𝟐 , …., 𝒙𝒏 are class marks and the corresponding
frequencies are 𝒇𝟏 , 𝒇𝟐 , …., 𝒇𝒏 , then arithmetic mean is
given by:
𝒏
𝑵= ∑ 𝒇𝒊
𝒊=𝟏
∑𝒏
𝟏 𝒇 𝒊 𝒙𝒊
̅=
𝒙
𝒏
EX. 2
The marks obtained in stat. exam for 10 students are:
90, 85, 40, 55, 78, 62, 77, 43, 100, 30.
90+85+40+55+78+62+77+43+100+30 660
̅=
𝒙 = = 66
10 10

EX. 3
Find the mean from the frequency table:
Xi 9 10 11 12 13 14 15 16
Freq=fi 2 5 12 17 14 6 3 1

Then 𝑵 = ∑𝒏𝒊=𝟏 𝒇𝒊 = 𝟔𝟎
And ∑𝒏𝟏 𝒇𝒊 𝒙𝒊 = 731
∑𝒏
𝟏 𝒇 𝒊 𝒙𝒊 𝟕𝟑𝟏
̅=
𝒙 = = 𝟏𝟐. 𝟏𝟖
𝒏 𝟔𝟎

Ex. 4
The following data represents income distribution of 100 families,
calculate mean income of 100 families.
Income in 30-40 40-50 50-60 60-70 70-80 80-90 90-100
‟00 Rs.

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

No. of 8 12 25 22 16 11 6
families

Solution: We have
Income in 30-40 40-50 50-60 60-70 70-80 80-90 90-100
‟00 Rs.
Class Mark 35 45 55 65 75 85 95
Xi
No. of 8 12 25 22 16 11 6
families fi
Xi * fi 280 540 1375 1430 1200 935 570

Then 𝑵 = ∑𝒏𝒊=𝟏 𝒇𝒊 = 𝟏𝟎𝟎

And ∑𝒏𝟏 𝒇𝒊 𝒙𝒊 = 6330
∑𝒏𝟏 𝒇 𝒊 𝒙𝒊 𝟔𝟑𝟑𝟎
̅=
𝒙 = = 𝟔𝟑. 𝟑
𝒏 𝟏𝟎𝟎
Merits of Mean

 It is rigidly defined.
 It is easy to understand & easy to calculate.
 It is based upon all values of the given data.
 It is capable of further mathematical treatment.
 It is not much affected by sampling fluctuations.

Demerits of Mean

 It cannot be calculated if any observations are missing.

 It cannot be calculated for the data with open end classes.
 It is affected by extreme values.
 It cannot be located graphically.
 It may be number which is not present in the data.
 It can be calculated for the data representing qualitative
characteristic.

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

2. Median
The Median is one of the measure of the site, ie, the criteria
that determine its location first and then determine its value. The
point or the value which divides the data in to two equal parts.,
or when the data is arranged in numerical order, The data must
be ranked (sorted in ascending order) first. The median is the
number in the middle. Depending on the data size.
1- Median of unclassified data:
Values are ordered ascending If the number of values is odd,
𝒏+𝟏
the median value is combined with the value of .
𝟐

Ex 1
Find the Median for the following values: 5, 18, 10, 7, 15, 23,
12.
Solution:
 The values will be in ascending order.
5, 7, 10, 12, 15, 18, 23.
 Number of values = 7.
𝒏+𝟏 𝟕+𝟏 𝟖
The order of median = = = =4
𝟐 𝟐 𝟐
The median= 12.
Values are ordered ascending If the number of values is
even, the median value is determined by the average of the
𝒏 𝒏
two values that are ordered:( ) ,( + 𝟏).
𝟐 𝟐
Ex 2
Find the Median for the following values: 5, 18, 10, 7, 15, 23,
12, 27.
Solution:
 The values will be in ascending order.
5, 7, 10, 12, 15, 18, 23, 27
 Number of values = 8.

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

𝒏 𝟖 𝒏
The order of median = ( ) = = 4, ( + 𝟏) = 𝟓
𝟐 𝟐 𝟐
𝟏𝟐+𝟏𝟓 𝟐𝟕
The median= = = 𝟏𝟑. 𝟓
𝟐 𝟐
2- Median of classified data:

Grouped Frequency Distribution First obtain the cumulative

frequencies for the data. Then mark the class corresponding
to which a cumulative frequency is greater than (N)/2 for
the first time. (N is the total number of observations.) Then
that class is median class. Then median is evaluated by
interpolation formula.
𝑵
( − 𝒄𝒇 )
𝐦𝐞𝐝𝐢𝐚 = 𝒍𝟏 + (𝒍𝟐 − 𝒍𝟏 ) 𝟐
𝒇𝒎
Where:
• 𝒍𝟏 = lower limit of the median class.
• 𝒍𝟐 = upper limit of the median class.
• N= Number of observations.
• 𝒄𝒇 = cumulative frequency of the class proceeding to the
median class.
• 𝒇𝒎 = frequency of the median class.
•
Ex. 3
Find the median
Daily wages 100-200 200-300 300-400 400-500 500-600 600-700
in 0$.
No. of 4 6 20 10 5 5
workers

Solution :
To locate median class we have to calculate cumulative
frequencies.
Daily wages 100-200 200-300 300-400 400-500 500-600 600-700
in 0$.

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

No. of 4 6 20 10 5 5
workers
Cum Freq. 4 10 30 40 45 50

N=50 , N/2= 25 so median class is 300-400

𝑵
( − 𝒄𝒇 )
𝐦𝐞𝐝𝐢𝐚𝐧 = 𝒍𝟏 + (𝒍𝟐 − 𝒍𝟏 ) 𝟐
𝒇𝒎
𝟓𝟎
( − 𝟏𝟎)
𝐦𝐞𝐝𝐢𝐚 = 𝟑𝟎𝟎 + (𝟒𝟎𝟎 − 𝟑𝟎𝟎) 𝟐
𝟐𝟎
𝟏𝟓
𝐦𝐞𝐝𝐢𝐚 = 𝟑𝟎𝟎 + (𝟏𝟎𝟎 × ) = 𝟑𝟕𝟓
𝟐𝟎
Example 2
Find the median from the following data.

Marks 0-10 10-30 30-50 50-80 80-90 90-100

No of 4 12 20 8 4 2
Students

Solution : To locate median class we have to calculate cumulative

frequencies.

Marks 0-10 10-30 30-50 50-80 80-90 90-100

No of 4 12 20 8 4 2
Students
Cumulative 4 16 36 44 48 50
Freq.

Here N=50 so N/2=25, hence median class is 30-50

𝑵
( − 𝒄𝒇 )
𝐦𝐞𝐝𝐢𝐚𝐧 = 𝒍𝟏 + (𝒍𝟐 − 𝒍𝟏 ) 𝟐
𝒇𝒎
𝟓𝟎
( − 𝟏𝟔)
𝐦𝐞𝐝𝐢𝐚 = 𝟑𝟎 + (𝟓𝟎 − 𝟑𝟎) 𝟐
𝟐𝟎

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

𝟗
𝐦𝐞𝐝𝐢𝐚 = 𝟑𝟎 + (𝟐𝟎 × ) = 𝟑𝟗
𝟐𝟎
Merits of Median

 It is rigidly defined.
 It is easy to understand & easy to calculate.
 It is not affected by extreme values.
 Even if extreme values are not known median can be
calculated.
 It can be located just by inspection in many cases.
 It can be located graphically.
 It is not much affected by sampling fluctuations.
 It can be calculated for data based on ordinal scale.

Demerits of Median

 It is not based upon all values of the given data.

 For larger data size the arrangement of data in the
increasing order is difficult process.
 It is not capable of further mathematical treatment.
 It is insensitive to some changes in the data values.

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Ahram Canadian University Third Level – All major
School of Business Administration Statistics
Dr. Hesham Tolba

3. The Mode
The mode is the value that occurs with the highest frequency in
a data set.

The mode is like the median; both do not use all the
information available in the data set. The mode is used for
both quantitative and qualitative data
Ex
You can determine the accurate meaning of the mode by
determining it in the following groups :
1, 5, 7, 9. no mode.
1, 5, 7, 9, 5. Mode = 5.
1, 5, 7, 9, 5, 7. There are two modes = 5,7.
1, 5, 7, 1, 5, 7. There is no mode because the values
repeat with the same amount.
1, 5, 7 , 5, 7, 1 ,5. Mode = 5.