Page 43 - DECO504_STATISTICAL_METHODS_IN_ECONOMICS_ENGLISH

Unit 4: Central Tendency: Mean, Median and Mode and their Properties
Hitesh Jhanji, Lovely Professional University

Unit 4: Central Tendency: Mean, Median and Mode and Notes

their Properties

CONTENTS
Objectives
Introduction
4.1 Meaning and Definition of Central Tendency
4.2 Mean, Median and Mode and their Properties
4.3 Summary
4.4 Key-Words
4.5 Review Questions
4.6 Further Readings

Objectives

After reading this unit students will be able to:
• Know the Meaning and Definition of Central Tendency.
• Discuss the Mean, Median and Mode and their Properties.
Introduction

For statistical analysis, condensation of data is essential so that the complexity of data is reduced and
is made comparable. This can be done by finding the central tendencies of the data or the averages.
By this, the large mass of data gets reduced to one figure each and thus comparison becomes much
easier. For example, if a comparison of student’s results in two different colleges with 200 students
each, is to be made, it seems to be impossible to draw any conclusion looking at the results of these
400 students. But if, each of these series is represented by a single figure, comparison becomes very
easy. This figure is the one which represents the whole series, and so it neither is the highest nor the
lowest value rather, it is the value where most of the items of the series cluster or are nearer. Such
figures present the central tendency of the series and are called Measures of central tendency or
Averages. Its value lies between maximum and minimum.
4.1 Meaning and Definition of Central Tendency

Measures of central tendency or averages reduce the large number of observations to one figure.
Actually the measures of central tendency describe the tendency of items of group around the middle
in a frequency distributions of numerical values.
Definitions

According to L. J. Kaplan — “One of the most widely used set of summary figures is known as measures
of location, which are often referred to as averages, central tendency or central location. The purpose
for computing an average value for a set of observations is to obtain a single value which is
representative of all the items and which the mind can grasp simply and quickly. The single value is
the point of location around which the individual items cluster.”
According to G.P. Watkins, “average is a representative figure which is gist, if not the substance of
statistics.”
In the words of Croxton and Cowden, “An average value is single value within the range of the data
that is used to represent all the values in the series.”

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