Averages 1

Average / Measure of Central Tendency: A single numerical value which is

mostly falls in the center of the data and used to represent data.
Types of Averages: There are five types of averages: Arithmetic Mean (A.M.)
Geometric Mean (G.M.)
Harmonic Mean (H.M.)
Median
Mode
1. Arithmetic Mean: Sum of values divided by the number of values is called
Arithmetic Mean. It is denoted by or A.M..

Advantages:
i. It is rigorously (carefully) defined by a mathematical formula.
ii. It is based upon all observation in the data.
iii. It is easy to calculate and simple to comprehend.
iv. It is determined for almost every kind of data.
v. It is relatively stable statistic with the fluctuations of sampling.
That is why it is universally used.
vi. It is amenable (agreeable) to mathematical treatment.
Disadvantages:
i. It is greatly affected by extreme values in the data.
ii. It gives sometimes fallacious (wrong) conclusions.
iii. In a highly skewed distribution, the mean is not an appropriate
measure of average.
iv. If the grouped data have open-end classes, mean cannot be
calculated without assuming the limits.

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Averages 2
2. Geometric Mean: The nth root of product of n values is called Geometric
Mean. It is normally denoted by G.M..
( )
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)
Advantages:
i. It is rigorously (carefully) defined by a mathematical formula.
ii. It is based on all observed values.
iii. It is amenable (agreeable) to mathematical treatment in
certain cases.
iv. It gives equal weightage to all the observations.
v. It is not much affected by sampling variability.
vi. It is an appropriate type of average to be used in case rates of
changes or ratios are to be averaged.
Disadvantages:
i. It is neither easy to calculate nor to understand.
ii. It vanishes if any observation is zero.
iii. In case of negative values, it cannot be computed for all.
3. Harmonic Mean: The reciprocal of the Arithmetic Mean of reciprocal of
values is called Harmonic Mean. It is denoted by the H.M.

Advantages:
i. It is rigorously (carefully) defined by a mathematical formula.
ii. It is based on all observation of the data.
iii. It is amenable (agreeable) to mathematical treatment.
iv. It is not much affected by sampling variability.
v. It is an appropriate type for averaging rates and ratios.

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Averages 3
Disadvantages:
i. It is not readily understood.
ii. It cannot be calculated, if any one of the observation is zero.
iii. It gives too much weightage to smaller observations.
4. Median: Most central value of an array is called Median.
Advantages:
i. It is easily calculated and understood.
ii. It is located even when the values are not capable of
quantitative measurement.
iii. It is not affected by extreme values. It can be computed even
when a frequency distribution involves open-end classes like
those of income and prices.
iv. In a highly skewed distribution, median is an appropriate
average to use.
Disadvantages:
i. It is not rigorously (carefully) defined.
ii. It is not capable of lending itself to further statistical
treatment.
iii. It necessitates of arrangement of data into an array which can
be tedious (boring) and time consuming for a large body of
data.
5. Mode: Most repeated value if the data is called Mode.
Advantages:
i. It is simply defined and easily calculated. In many cases, it is
extremely easy to locate the mode.
ii. It is not affected by abnormally large or small observations.

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Averages 4
iii. It can be determined for both the quantitative and qualitative
data.
Disadvantages:
i. It is not rigorously (carefully) defined.
ii. It is often indeterminate and indefinite.
iii. It is not based on all the observations made.
iv. It is not capable of landing itself to further statistical
treatment.
v. When the distribution consists of a small number of values, the
mode may not exist.
Suitable Average:
Symmetrical Data (Mean = Median = Mode):
Most suitable average for symmetrical data is Arithmetic
Mean.
Skewed Data (Mean Median Mode):
Most suitable average for skewed data is Median.

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