BASIC TOOLS OF ECONOMIC ANALYSIS

CONTENT

Measures of Central Tendencies (Measures of Location or Averages or Position)

1. Meaning of Measures of Central Tendencies
2. Mean
3. Median
4. Mode

Measures of Central Tendencies (Measures of Location or Averages or Position)

Meaning of Measures of Central Tendencies

Measures of Central Tendency are forms of averages. They summarize the mass of data presented in a distribution. They include: Mean, Median and Mode

Mean

It is the average of variables or items in a data. It is the most common kind of average. It is calculated by dividing the sum total of the items by the number of items in the group. Mathematically, the formula for calculating mean is

\(\overline{x} = {{\sum fx} \over {\sum f}}\) or \(\overline{x} = {{\sum x} \over n}\)

Where \(\overline{x}\) = mean X = values of the different items

n = number of items

f = frequency

∑x = summation of x

∑f = summation of frequency

Note: we use \({{\sum x} \over n}\) for few sets of values, \({{\sum fx} \over {\sum f}}\) for large volumes of data

Data with few items

Example 1: The ages of seven students of SS 2A are 12, 15, 16, 17, 18, 13, 14.