Descriptive Statistics:

Numerical Measures
1.Measures of Location
2.Measures of Variability
3.The Weighted Mean
4.Working with Grouped Data
Measures of Location
Numerical Measures
 If the measures are computed for data from a sample,
they are called sample statistics.
 If the measures are computed for data from a
population, they are called population parameters.
 In statistical inference, a sample statistic is referred to as
the point estimator of the corresponding population
parameter
Mean
 Perhaps the most important measure of location is the mean.
 The mean provides a measure of data central location .
 The mean of a data set is the average of all the data values.
 The sample mean is the point estimator of the population
mean µ.

  Sample Mean Population Mean m

where: where:
Sxi = sum of the values of n observations Sxi = sum of the values of the N observations
n = number of observations in the sample N = number of observations in the population
Mean
Consider the following class size data for a sample of five college
classes:
46 54 42 46 32

To compute the sample mean, we can write:

Mean

The mean monthly starting salary for

the sample of 12 business college
graduates is computed as
Median
 The median of a data set is the value in the middle when the
data items are arranged in ascending order.
 Whenever a data set has extreme values, the median is the
preferred measure of central location.
 The median is the measure of location most often reported
for annual income and property value data.
 A few extremely large incomes or property values can inflate
the mean.
 Median
Let us apply this definition to compute the median class size for the sample of five
college classes. Arranging the data in ascending order provides the following list.
32 42 46 46 54
Because n=5 is odd, the median is the middle value. Thus the median class size is
46 students.

Suppose we also compute the median starting salary for the 12 business
college graduates in previous Table. We first arrange the data in ascending order.

Because n=12 is even, we identify the middle two values: 3890 and 3920. The
median is the average of these values.
 Mode
 The mode of a data set is the value that occurs with greatest
frequency.
 The greatest frequency can occur at two or more different values.
 If the data have exactly two modes, the data are bimodal.
 If the data have more than two modes, the data are multimodal.

550 occurred most frequently (7 times), Mode = 550

Note: Data is in ascending order.

Percentiles
A percentile provides information about how the data are spread
over the interval from the smallest value to the largest value
Percentiles

The 85th percentile is the data value in the 11th position, or 4130.
Quartiles
It is often desirable to divide data into four parts, with each part
containing approximately one-fourth, or 25% of the observations. The
division points are referred to as the quartiles and are defined as

Q1 = first quartile, or 25th percentile

Q2 = second quartile, or 50th percentile (also the median)
Q3 = third quartile, or 75th percentile.
Measures of Variability
Variability
In addition to measures of location, it is often desirable to consider
measures of variability, or dispersion.
For example, suppose that you are a purchasing agent for a large manufacturing
firm and that you regularly place orders with two different suppliers. After
several months of operation, you find that the mean number of days required to
fill orders is 10 days for both of the suppliers.
Range
The simplest measure of variability is the range.

Let us refer to the data on starting salaries for business school graduates
below. The largest starting salary is 4325 and the smallest is 3710.
The range is 4325-3710 = 615.
 Interquartile Range
 A measure of variability that overcomes the dependency on
extreme values is the interquartile range (IQR).
 The interquartile range is the range for the middle 50% of the
data.

For the data on monthly starting salaries above, the quartiles are Q3 = 4000
and Q1 = 3865. Thus, the interquartile range is 4000-3865 = 135.
Variance & Standard Deviation
 The variance is a measure of variability that utilizes all the data.
 It is based on the difference between the value of each observation
(xi) and the mean ( for a sample, m for a population).
 The variance is useful in comparing the variability of two or more
variables.
SAMPLE VARIANCE POPULATION VARIANCE

 The standard deviation is the positive square root of the variance.

 It is measured in the same units as the data, making it more easily
interpreted than the variance.
Variance
Coefficient of Variation
In some situations we may be interested in a descriptive statistic that
indicates how large the standard deviation is relative to the mean.
This measure is called the coefficient of variation and is usually
expressed as a percentage.

 For the previous class size data, the coefficient of variation is

[(8/44)x100]%=18.2%. It tells us that the sample standard
deviation is 18.2% of the value of the sample mean.
 In general, the coefficient of variation is a useful statistic for
comparing the variability of variables that have different standard
deviations and different means.
Coefficient of Variation
 

s = 2 mm s = 2 mm
= 15 mm = 70 mm
Cov = 13,33% Cov = 2,86%
The Weighted Mean
Weighted Mean
In the formulas for the sample mean and population mean, each x i is
given equal importance or weight. For instance, the formula for the
sample mean can be written as follows:

In some instances the mean is computed by giving each observation a

weight that reflects its relative importance. A mean computed in
this manner is referred to as a weighted mean. The weighted mean
is computed as follows:
Weighted Mean
Consider the following sample of five purchases of a raw material over the
past three months.

The weighted mean is calculated as follows:

As a comparison, the sample mean of the five cost-per-pound values is

(3.00+3.40+2.80+2.90+3.25)/5=15.35/5= $3.07, which overstates the
actual mean cost per pound purchased.
Weighted Mean of Grade Point
Average (GPA)

GPA=3,29
Working with Grouped Data
Grouped Data
In most cases, measures of location and variability are computed by
using the individual data values. Sometimes, however, data are
available only in a grouped or frequency distribution form.
Grouped Data
 Grouped Data

Note:
The class midpoints, Mi, halfway between the class limits, the first class of 10 –14 has
a midpoint at (14-10)/2=12.