Chapter 3

Numerical Descriptive
Measures
Part I

Copyright © 2020 Pearson Education Ltd. Slide 1

 Objectives

In this chapter, you learn to:

 Describe the properties of central tendency and

variation in numerical variables.

 Compute descriptive summary measures for a

sample and for a population.

Copyright © 2020 Pearson Education Ltd. Slide 2

 Numerical Descriptive
Measures

1) Measures of Central Tendency.

 Mean, Median, Mode

2) Measures of Variation
 Range, Standard Deviation, Variance, Coefficient of
Variation

Copyright © 2020 Pearson Education Ltd. Slide 3

 Summary Definitions
DCOVA
 The central tendency (or central location) is the
extent to which the values of a numerical variable
group around a typical or central value.

 The variation (or variability) is the amount of

dispersion or scattering away from a central value
that the values of a numerical variable show.

 The shape is the pattern of the distribution of values

from the lowest value to the highest value.
Copyright © 2020 Pearson Education Ltd. Slide 4
1) Measures of Central Tendency:
The Population Mean µ
DCOVA
 The population mean is the sum of the values in
the population divided by the population size, N.

X i
X1  X 2    XN
 i1

N N
Where μ = population mean
N = population size
Xi = ith value of the variable X
Copyright © 2020 Pearson Education Ltd. Slide 5
 1) Measures of Central Tendency:
The Sample Mean DCOVA

 The arithmetic mean (often just called the “mean”)

is the most common measure of central tendency.

 For a sample of size n:

Pronounced x-bar
The ith value
n

X i
X1  X 2    Xn
X i1

n n
Sample size Observed values
Copyright © 2020 Pearson Education Ltd. Slide 6
 Example 3.1
 Nutritional data about a sample of seven
breakfast cereals (stored in Cereals.xls)
includes the number of calories per serving:

 Compute the mean number of calories using

Excel.
Copyright © 2020 Pearson Education Ltd. Slide 7
 1) Measures of Central Tendency:
The Mean (con’t) DCOVA

 The most common measure of central tendency.

 Mean = sum of values divided by the number of values.
 Affected by extreme values (outliers).

11 12 13 14 15 16 17 18 19 20 11 12 13 14 15 16 17 18 19 20

Mean = 13 Mean = 14
11  12  13  14  15 65 11  12  13  14  20 70
  13   14
5 5 5 5

Copyright © 2020 Pearson Education Ltd. Slide 8

 1) Measures of Central Tendency:
Locating the Median
DCOVA
 The location of the median when the values are in numerical order
(smallest to largest):

n 1
Median position  position in the ordered data
2
 If the number of values is odd, the median is the middle number.

 If the number of values is even, the median is the average of the

two middle numbers.

n 1
Note that is not the value of the median, only the position of
2
the median in the ranked data.

Copyright © 2020 Pearson Education Ltd. Slide 9

 1) Measures of Central Tendency:
The Median DCOVA

 In an ordered array, the median is the “middle”

number (50% above, 50% below).

11 12 13 14 15 16 17 18 19 20 11 12 13 14 15 16 17 18 19 20

Median = 13 Median = 13

 Less sensitive than the mean to extreme values.

Copyright © 2020 Pearson Education Ltd. Slide 10

 Example 3.2

 Nutritional data about a sample of seven

breakfast cereals (stored in Cereals.xls)
includes the number of calories per serving
(see Example 3.1).
 Compute the median number of calories in
breakfast cereals using Excel.

Copyright © 2020 Pearson Education Ltd. Slide 11

 1) Measures of Central Tendency:
The Mode
DCOVA
 Value that occurs most often.
 Not affected by extreme values.
 Used for either numerical or categorical data.
 There may be no mode.
 There may be several modes.

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 0 1 2 3 4 5 6

Mode = 9 No Mode

Copyright © 2020 Pearson Education Ltd. Slide 12

 Example 3.3

 A systems manager in charge of a company’s

network keeps track of the number of server
failures that occur in a day.
 Determine the mode for the following data,
which represent the number of server failures
per day for the past two weeks:
1 3 0 3 26 2 7 4 0 2 3 3 6 3

Copyright © 2020 Pearson Education Ltd. Slide 13

 1) Measures of Central Tendency:
Review Example
DCOVA
House Prices:  Mean: (QAR 15,000,000/5)
QAR 8,000,000 = QAR 3,000,000
QAR 3,000,000
QAR 2,000,000
 Median: middle value of ranked
QAR 1,000,000 data
QAR 1,000,000 = QAR 2,000,000
Sum QAR
15,000,000  Mode: most frequent value
= QAR 1,000,000

Copyright © 2020 Pearson Education Ltd. Slide 14

1) Measures of Central Tendency:
Review Video

https://youtu.be/h8EYEJ32oQ8

Copyright © 2020 Pearson Education Ltd. Slide 15

 1) Measures of Central Tendency:
Which Measure to Choose?
DCOVA
 The mean is generally used, unless extreme values
(outliers) exist.
 The median is often used, since the median is not
sensitive to extreme values. For example, median
home prices may be reported for a region; it is less
sensitive to outliers.
 In many situations it makes sense to report both the
mean and the median.

Copyright © 2020 Pearson Education Ltd. Slide 16

 1) Measures of Central Tendency:
Summary
DCOVA
Central Tendency

Arithmetic Median Mode

Mean
n

X i
X i1
n Middle value Most
in the ordered frequently
array observed
value

Copyright © 2020 Pearson Education Ltd. Slide 17

 2) Measures of Variation
Variation DCOVA

Range Variance Standard Coefficient

Deviation of Variation

 Measures of variation give

information on the spread or
variability or dispersion of
the data values.

Same center,
different variation
Copyright © 2020 Pearson Education Ltd. Slide 18
 2) Measures of Variation:
The Range
DCOVA
 Simplest measure of variation.
 Difference between the largest and the smallest values:

Range = Xlargest – Xsmallest

Example:

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Range = 13 - 1 = 12
Copyright © 2020 Pearson Education Ltd. Slide 19
 Example 3.5

 Nutritional data about a sample of seven

breakfast cereals (stored in Cereals.xls)
includes the number of calories per serving
(see Example 3.1).

 Compute the range of the number of calories for

the cereals using Excel.

Copyright © 2020 Pearson Education Ltd. Slide 20

 2) Measures of Variation:
Why The Range Can Be Misleading
DCOVA
 Does not account for how the data are distributed.

7 8 9 10 11 12 7 8 9 10 11 12
Range = 12 - 7 = 5 Range = 12 - 7 = 5

 Sensitive to outliers
1,1,1,1,1,1,1,1,1,1,1,2,2,2,2,2,2,2,2,3,3,3,3,4,5
Range = 5 - 1 = 4

1,1,1,1,1,1,1,1,1,1,1,2,2,2,2,2,2,2,2,3,3,3,3,4,120
Range = 120 - 1 = 119

Copyright © 2020 Pearson Education Ltd. Slide 21

 2) Measures of Variation:
The Population Variance σ2
DCOVA
 Average of squared deviations of values from
the mean.
N
 Population variance:  (X  μ)
i
2

σ2  i1
N

Where μ = population mean

N = population size
Xi = ith value of the variable X
Copyright © 2020 Pearson Education Ltd. Slide 22
 2) Measures of Variation:
The Sample Variance
DCOVA
 Average (approximately) of squared deviations
of values from the mean.
n
 Sample variance:
 (X i  X) 2

S  2 i 1
n -1
Where X = arithmetic mean
n = sample size
Xi = ith value of the variable X
Copyright © 2020 Pearson Education Ltd. Slide 23
 2) Measures of Variation:
The Population Standard Deviation σ
DCOVA
 Most commonly used measure of variation.
 Shows variation about the mean.
 Is the square root of the population variance.
 Has the same units as the original data.

N
Population standard deviation:
 i 
 2
(X μ)
σ i1
N

Copyright © 2020 Pearson Education Ltd. Slide 24

 2) Measures of Variation:
The Sample Standard Deviation
DCOVA
 Most commonly used measure of variation.
 Shows variation about the mean.
 Is the square root of the variance.
 Has the same units as the original data.

n
 Sample standard deviation:  (X  X)
i
2

S i1
n -1

Copyright © 2020 Pearson Education Ltd. Slide 25

 2) Measures of Variation:
The Sample Standard Deviation
DCOVA
Steps for Computing Standard Deviation:

1. Compute the difference between each value and

the mean.
2. Square each difference.
3. Add the squared differences.
4. Divide this total by n-1 to get the sample
variance.
5. Take the square root of the sample variance to
get the sample standard deviation.

Copyright © 2020 Pearson Education Ltd. Slide 26

2) Measures of Variation:
Sample Standard Deviation Calculation
Example
DCOVA
Sample
Data (Xi) : 10 12 14 15 17 18 18 24
n=8 Mean = X = 16
(10  X)2  (12  X)2  (14  X)2    (24  X)2
S
n 1

(10  16)2  (12  16)2  (14  16)2    (24  16)2


8 1

130 A measure of the “average”

  4.3095
7 scatter around the mean.
Copyright © 2020 Pearson Education Ltd. Slide 27
 Example 3.6

 Nutritional data about a sample of seven

breakfast cereals (stored in Cereals.xls)
includes the number of calories per serving
(see Example 3.1).

 Compute the variance and standard deviation of

the calories in the cereals using Excel.

Copyright © 2020 Pearson Education Ltd. Slide 28

2) Measures of Variation:
Comparing Standard Deviations
DCOVA
Data A
Mean = 15.5
11 12 13 14 15 16 17 18 19 20 S = 3.338
21

Data B Mean = 15.5

11 12 13 14 15 16 17 18 19 20
S = 0.926
21

Data C Mean = 15.5

S = 4.567
11 12 13 14 15 16 17 18 19 20 21

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 2) Measures of Variation:
Comparing Standard Deviations
DCOVA

Smaller standard deviation

Larger standard deviation

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 2) Measures of Variation:
Summary Characteristics
DCOVA
 The more the data are spread out, the greater the
range, variance, and standard deviation.

 The more the data are concentrated, the smaller the

range, variance, and standard deviation.

 If the values are all the same (no variation), all these
measures will be zero.

 None of these measures are ever negative.

Copyright © 2020 Pearson Education Ltd. Slide 31
2) Measures of Variation:
Review video

https://youtu.be/E4HAYd0QnRc

Copyright © 2020 Pearson Education Ltd. Slide 32

 2) Measures of Variation:
The Coefficient of Variation
DCOVA
 Measures relative variation.
 Always in percentage (%).
 Shows variation relative to mean.
 Can be used to compare the variability of two or
more sets of data measured in different units.

 S
CV     100%

X 
Copyright © 2020 Pearson Education Ltd. Slide 33
2) Measures of Variation:
Comparing Coefficients of Variation
DCOVA

Both stocks have the

same standard deviation,
but stock B is less
variable relative to its
mean price.

Copyright © 2020 Pearson Education Ltd. Slide 34

2) Measures of Variation:
Comparing Coefficients of Variation (con’t)

DCOVA

Stock C has a much smaller

standard deviation but a
much higher coefficient of
variation

Copyright © 2020 Pearson Education Ltd. Slide 35

 Example 3.7

 Nutritional data about a sample of seven

breakfast cereals (stored in Cereals.xls)
includes the number of calories and the amount
of sugar per serving (in grams).
 Which varies more from cereal to cereal—the
number of calories or the amount of sugar?
 Because calories and the amount of sugar have
different units of measurement, you need to
compare the relative variability in the two
measurements.
Copyright © 2020 Pearson Education Ltd. Slide 36
 Example from real life. 3.7.
Coefficient of variation Coefficient of variation

Calories Sugar  Calories

Mean 130 5.857142857
 CV= (46.9/130)*100=36%.
Standard Error
Median
17.72810521
110
1.280412349
4
 Sugar
Mode 100 4
Standard Deviation 46.9041576 3.38765265
 CV=(3.39/5.86)*100=57.8%.
Sample Variance 2200 11.47619048
Kurtosis -1.061157025 -0.966749884
 Conclusion.
Skewness 0.841173735 0.783416183
Range 120 9
 More variability in the
Minimum
Maximum
80
200
2
11 amount of sugar.
Sum 910 41
Count 7 7

Copyright © 2020 Pearson Education Ltd. Slide 37

Sample statistics versus
population parameters DCOVA

Measure Population Sample

Parameter Statistic
Mean  X
Variance
2 S2

Standard  S
Deviation
Coefficient of cv = CV =
Variation

Copyright © 2020 Pearson Education Ltd. Slide 38

.

Statistics versus Parameters

 The parameters (Mean, standard deviations) are
generally unknown.

 We use samples to estimate statistics.

 We use statistics to make inferences about

parameters. (Inferential Statistics)

 We usually use samples instead of populations.

Copyright © 2020 Pearson Education Ltd. Slide 39