BIC 3006

Data Analysis
NUMERICAL DESCRIPTIVE
MEASURES
MEASURES OF CENTRAL TENDENCY FOR
UNGROUPED DATA
 Mean
 Median
 Mode
 Relationships among the Mean, Median, and Mode
Figure 1
Mean
The mean for ungrouped data is obtained by dividing the
sum of all values by the number of values in the data set. Thus,

Mean for population data:    x

N

Mean for sample data: x 

 x
n

where  x is the sum of all values; N is the population size; n

is the sample size;  is the population mean; and x is the
sample mean.
Example 1
Table 1 lists the total cash donations (rounded to millions of
dollars) given by eight U.S. companies during the year 2010.
Table 1 Cash Donations in 2010 by Eight Companies

Find the mean of cash donations made by these eight

companies.
Example 1: Solution

 x  x1  x 2  x 3  x 4  x 5  x 6  x 7  x 8
 319  199  110  63  21  315  26  63  1116

x
 x

1116
 139 . 5  $ 139 .5 million
n 8

Thus, these eight companies donated an average of $139.5 million in

2010 for charitable purposes.
Example 2
The following are the ages (in years) of all eight employees of a
small company:
53 32 61 27 39 44 49 57
Find the mean age of these employees.
Example 2: Solution
The population mean is

  x 362
  45.25 years
N 8

Thus, the mean age of all eight employees of this company is

45.25 years, or 45 years and 3 months.
Example 3
Table 2 lists the total number of homes lost to foreclosure in
seven states during 2010.
Table 2 Number of Homes Foreclosed in 2010
Example 3
Note that the number of homes foreclosed in California is
very large compared to those in the other six states.
Hence, it is an outlier. Show how the inclusion of this outlier
affects the value of the mean.
 Example 3: Solution
 If we do not include the number of homes foreclosed in
California (the outlier), the mean of the number of foreclosed
homes in six states is

Mean without the outlier

49,723  20,352  10,824  40,911  18,038  61,848

6
201,696
  33,616
6
 Example 3: Solution
 Now, to see the impact of the outlier on the value of the
mean, we include the number of homes foreclosed in
California and find the mean number of homes foreclosed
in the seven states. This mean is
 Median
 Definition
 The median is the value of the middle term in a data set that
has been ranked in increasing order.

 The calculation of the median consists of the following two

steps:
1. Rank the data set in increasing order.
2. Find the middle term. The value of this term is the median.
Example 4
Refer to the data on the number of homes foreclosed in seven
states given in Table 2 of Example 3. Those values are
listed below.

173,175 49,723 20,352 10,824 40,911 18,038 61,848

Find the median for these data.

Example 4: Solution
First, we rank the given data in increasing order as follows:
10,824 18,038 20,352 40,911 49,723 61,848 173,175
Since there are seven homes in this data set and the middle
term is the fourth term,

Thus, the median number of homes foreclosed in these seven

states was 40,911 in 2010.
 Example 5
 Table 3 gives the total compensations (in millions of dollars)
for the year 2010 of the 12 highest-paid CEOs of U.S.
companies.
Table 3 Total Compensations of 12 Highest-Paid CEOs
for the Year 2010
Find the median for
these data.
 Example 5: Solution
 First we rank the given total compensations of the 12 CESs as
follows:

 21.6 21.7 22.9 25.2 26.5 28.0 28.2 32.6 32.9 70.1 76.1 84.5

 There are 12 values in this data set. Because there are an even
number of values in the data set, the median is given by the
average of the two middle values.
 Example 5: Solution
 The two middle values are the sixth and seventh in the
arranged data, and these two values are 28.0 and 28.2.

28 . 0  28 . 2 56 . 2
Median    28 . 1  $ 28 . 1 million
2 2

 Thus, the median for the 2010 compensations of these 12

CEOs is $28.1 million.
Median
The median gives the center of a histogram, with half the data
values to the left of the median and half to the right of the
median. The advantage of using the median as a measure of
central tendency is that it is not influenced by outliers.
Consequently, the median is preferred over the mean as a
measure of central tendency for data sets that contain outliers.
Case Study 1 Education Pays
 Mode
 Definition
 The mode is the value that occurs with the highest frequency
in a data set.
 Example 6
 The following data give the speeds (in miles per hour) of eight
cars that were stopped on I-95 for speeding violations.

77 82 74 81 79 84 74 78

Find the mode.

 Example 6: Solution
 In this data set, 74 occurs twice and each of the remaining
values occurs only once. Because 74 occurs with the highest
frequency, it is the mode. Therefore,

Mode = 74 miles per hour

Mode
 A major shortcoming of the mode is that a data set may
have none or may have more than one mode, whereas it
will have only one mean and only one median.
 Unimodal: A data set with only one mode.
 Bimodal: A data set with two modes.
 Multimodal: A data set with more than two modes.
 Example 7 (Data set with no mode)
 Last year’s incomes of five randomly selected families were
$76,150, $95,750, $124,985, $87,490, and $53,740.

 Find the mode.

 Example 7: Solution
 Because each value in this data set occurs only once, this data
set contains no mode.
Example 8 (Data set with two modes)
A small company has 12 employees. Their commuting times
(rounded to the nearest minute) from home to work are 23,
36, 12, 23, 47, 32, 8, 12, 26, 31, 18, and 28, respectively.

Find the mode for these data.

Example 8: Solution
In the given data on the commuting times of the 12
employees, each of the values 12 and 23 occurs twice, and
each of the remaining values occurs only once. Therefore, that
data set has two modes: 12 and 23 minutes.
Example 9 (Data set with three modes)
The ages of 10 randomly selected students from a class are 21,
19, 27, 22, 29, 19, 25, 21, 22 and 30 years, respectively.

Find the mode.

Example 9: Solution
This data set has three modes: 19, 21 and 22. Each of these
three values occurs with a (highest) frequency of 2.
Mode
One advantage of the mode is that it can be calculated for
both kinds of data - quantitative and qualitative - whereas the
mean and median can be calculated for only quantitative data.
 Example 10
 The status of five students who are members of the student
senate at a college are senior, sophomore, senior, junior, and
senior, respectively. Find the mode.
 Example 10: Solution
 Because senior occurs more frequently than the other
categories, it is the mode for this data set. We cannot calculate
the mean and median for this data set.
Relationships Among the Mean, Median, and Mode
1. For a symmetric histogram and frequency distribution with
one peak (see Figure 2), the values of the mean, median,
and mode are identical, and they lie at the center of the
distribution.
Figure 2 Mean, median, and mode for a symmetric
histogram and frequency distribution curve.
Relationships Among the Mean, Median, and Mode
2. For a histogram and a frequency distribution curve skewed
to the right (see Figure 3), the value of the mean is the
largest, that of the mode is the smallest, and the value of
the median lies between these two. (Notice that the mode
always occurs at the peak point.) The value of the mean is
the largest in this case because it is sensitive to outliers
that occur in the right tail. These outliers pull the mean to
the right.
Figure 3 Mean, median, and mode for a histogram and
frequency distribution curve skewed to the right.
Relationships Among the Mean, Median, and Mode
3. If a histogram and a frequency distribution curve are
skewed to the left (see Figure 4), the value of the mean is
the smallest and that of the mode is the largest, with the
value of the median lying between these two. In this case,
the outliers in the left tail pull the mean to the left.
Figure 4 Mean, median, and mode for a histogram and
frequency distribution curve skewed to the left.
MEASURES OF DISPERSION FOR UNGROUPED
DATA
 Range
 Variance and Standard Deviation
 Population Parameters and Sample Statistics
Range
Finding the Range for Ungrouped Data

Range = Largest value – Smallest Value

 Example 11
 Table 4 gives the total areas in square miles of the four
western South-Central states of the United States.

 Find the range for this data set.

Table 4
Example 11: Solution
Range = Largest value – Smallest Value
= 267,277 – 49,651
= 217,626 square miles

Thus, the total areas of these four states are spread over a range of
217,626 square miles.
Range
Disadvantages
 The range, like the mean, has the disadvantage of being
influenced by outliers. Consequently, the range is not a good
measure of dispersion to use for a data set that contains
outliers.
 Its calculation is based on two values only: the largest and
the smallest. All other values in a data set are ignored when
calculating the range. Thus, the range is not a very
satisfactory measure of dispersion.
Variance and Standard Deviation
 The standard deviation is the most-used measure of
dispersion.

 The value of the standard deviation tells how closely the

values of a data set are clustered around the mean.

 In general, a lower value of the standard deviation for a data

set indicates that the values of that data set are spread over
a relatively smaller range around the mean.
Variance and Standard Deviation
 In contrast, a larger value of the standard deviation for a
data set indicates that the values of that data set are
spread over a relatively larger range around the mean.

 The standard deviation is obtained by taking the positive

square root of the variance.
Variance and Standard Deviation
 The variance calculated for population data is denoted by σ²
(read as sigma squared), and the variance calculated for
sample data is denoted by s².

 The standard deviation calculated for population data is

denoted by σ, and the standard deviation calculated for
sample data is denoted by s.

 Consequently, the standard deviation calculated for

population data is denoted by σ, and the standard deviation
calculated for sample data is denoted by s.
Variance and Standard Deviation
Basic Formulae for the Variance and Standard Deviation for
Ungrouped Data

 2

 x   
2

and s 2

 x  x
2

N n 1

 x     x  x 
2 2

  and s
N n 1

where σ² is the population variance, s² is the sample variance,

σ is the population standard deviation, and s is the sample
standard deviation.
Variance and Standard Deviation
Short-cut Formulas for the Variance and Standard Deviation
for Ungrouped Data

 x
2
 x
2

x  N
2
x  n
2

2  and s2 
N n 1
 x
2
 x
2

x  N 2
x  n
2

  and s
N n 1
where σ² is the population variance, s² is the sample variance,
σ is the population standard deviation, and s is the sample
standard deviation.
Example 12
Until about 2009, airline passengers were not charged for checked
baggage. Around 2009, however, many U.S. airlines started charging a
fee for bags. According to the Bureau of Transportation Statistics, U.S.
airlines collected more than $3 billion in baggage fee revenue in 2010.
The following table lists the baggage fee revenues of six U.S. airlines
for the year 2010. (Note that Delta’s revenue reflects a merger with
Northwest. Also note that since then United and Continental have
merged; and American filed for bankruptcy and may merge with
another airline.)
Find the variance and standard deviation for these data.
Example 12
Example 12: Solution
Let x denote the 2010 baggage fee revenue (in millions of
dollars) of an airline. The values of Σx and Σx2 are calculated
in Table 6.
Example 12: Solution
Step 1. Calculate Σx
The sum of values in the first column of Table 6 gives 2,854.

Step 2. Find Σx2

The results of this step are shown in the second column of
Table 6, which is 1,746,098.
Example 12: Solution
Step 3. Determine the variance

 x
2
2 ,854 
2

x  n
2
1, 746 , 098 
6
s2  
n 1 6 1
1, 746 , 098  1,357 ,552 . 667

5
 77 , 709 . 06666
Example 12: Solution
Step 4. Obtain the standard deviation
The standard deviation is obtained by taking the (positive) square root
of the variance:

 x
2

x  n
2

s  77 ,709 . 06666
n 1
 278 . 7634601  $ 278 . 76 million

Thus, the standard deviation of the 2010 baggage fee revenues of

these six airlines is $278.76 million.
Two Observations
1. The values of the variance and the standard deviation are
never negative.

2. The measurement units of variance are always the square

of the measurement units of the original data.
Example 13
Following are the 2011 earnings (in thousands of dollars)
before taxes for all six employees of a small company.

88.50 108.40 65.50 52.50 79.80 54.60

Calculate the variance and standard deviation for these data.

Example 13: Solution
Let x denote the 2011 earnings before taxes of an employee
of this company. The values of ∑x and ∑x2 are calculated in
Table 7.
Example 13: Solution

  x
2
2
(449.30)
 x 2

N
35,978.51 
6
2    388.90
N 6
  388.90  $19.721 thousand  $19,721

Thus, the standard deviation of the 2011 earnings of all six

employees of this company is $19,721.
Warning
Note that ∑x2 is not the same as (∑x)2. The value of ∑x2 is
obtained by squaring the x values and then adding them. The
value of (∑x)2 is obtained by squaring the value of ∑x.
Population Parameters and Sample Statistics
 A numerical measure such as the mean, median, mode,
range, variance, or standard deviation calculated for a
population data set is called a population parameter, or
simply a parameter.

 A summary measure calculated for a sample data set is

called a sample statistic, or simply a statistic.
MEAN, VARIANCE AND STANDARD DEVIATION
FOR GROUPED DATA
 Mean for Grouped Data
 Variance and Standard Deviation for Grouped Data
Mean for Grouped Data
Calculating Mean for Grouped Data

Mean for population data:   mf

N

Mean for sample data:

x
 mf
n

where m is the midpoint and f is the frequency of a class.

Example 14
Table 8 gives the frequency distribution of the daily commuting
times (in minutes) from home to work for all 25 employees of a
company.

Calculate the mean of the daily commuting times.

Example 14
Example 14: Solution
Example 14: Solution

  mf

535
 21.40 minutes
N 25

Thus, the employees of this company spend an average of

21.40 minutes a day commuting from home to work.
Example 15
Table 10 gives the frequency distribution of the number of
orders received each day during the past 50 days at the office
of a mail-order company.

Calculate the mean.

Example 15
Example 15: Solution
Example 15: Solution

x
 mf

832
 16.64 orders
n 50
Thus, this mail-order company received an average of
16.64 orders per day during these 50 days.
Variance and Standard Deviation for Grouped Data
Basic Formulas for the Variance and Standard Deviation for
Grouped Data

 f m     f m  x 
2 2

 2
 and s 2

N n 1

where σ² is the population variance, s² is the sample variance,

and m is the midpoint of a class. In either case, the standard
deviation is obtained by taking the positive square root of the
variance.
Variance and Standard Deviation for Grouped Data
Short-Cut Formulas for the Variance and Standard Deviation
for Grouped Data

( mf ) 2
 mf 
2

 m f2

N
m f  n
2

2  and s 2 
N n 1

where σ² is the population variance, s² is the sample variance,

and m is the midpoint of a class.
Variance and Standard Deviation for Grouped Data
Short-cut Formulas for the Variance and Standard Deviation for
Grouped Data

The standard deviation is obtained by taking the positive

square root of the variance.
Population standard deviation:    2

Sample standard deviation: s s2

Example 16
The following data, reproduced from Table 8 of Example 14,
give the frequency distribution of the daily commuting times (in
minutes) from home to work for all 25 employees of a company.

Calculate the variance and standard deviation.

Example 16
Example 16: Solution
Example 16: Solution

 m f 
2 (  mf ) 2

14 ,825 
( 535 ) 2
N 25 3376
 2
    135 . 04
N 25 25

   2
 135 . 04  11 . 62 minutes

Thus, the standard deviation of the daily commuting times for these
employees is 11.62 minutes.
Example 17
The following data, reproduced from Table 10 of Example 15,
give the frequency distribution of the number of orders
received each day during the past 50 days at the office of a
mail-order company.

Calculate the variance and standard deviation.

Example 17
Example 17: Solution
Example 17: Solution

 m 2
f 
(  mf ) 2

14,216 
(832 ) 2

s2  n  50  7.5820
n 1 50  1

s  s 2  7.5820  2.75 orders

Thus, the standard deviation of the number of orders received at the

office of this mail-order company during the past 50 days is 2.75.
 USE OF STANDARD DEVIATION
Empirical Rule
 For a bell shaped distribution, approximately
1. 68% of the observations lie within one standard deviation
of the mean
2. 95% of the observations lie within two standard deviations
of the mean
3. 99.7% of the observations lie within three standard
deviations of the mean
Figure 9 Illustration of the empirical rule.
 Example 19
 The age distribution of a sample of 5000 persons is bell-shaped
with a mean of 40 years and a standard deviation of 12 years.
Determine the approximate percentage of people who are 16 to
64 years old.
 Example 19: Solution
 From the given information, for this distribution,
 x = 40 and s = 12 years

 Each of the two points, 16 and 64, is 24 units away from the
mean.

 Because the area within two standard deviations of the mean

is approximately 95% for a bell-shaped curve, approximately
95% of the people in the sample are 16 to 64 years old.
Figure 10 Percentage of people who are 16 to 64 years
old.
MEASURES OF POSITION
 Quartiles and Interquartile Range
 Percentiles and Percentile Rank
 Quartiles and Interquartile Range
 Definition
 Quartiles are three summary measures that divide a ranked
data set into four equal parts. The second quartile is the same
as the median of a data set. The first quartile is the value of
the middle term among the observations that are less than the
median, and the third quartile is the value of the middle term
among the observations that are greater than the median.
Figure 11 Quartiles.
 Quartiles and Interquartile Range
 Calculating Interquartile Range
 The difference between the third and the first quartiles gives
the interquartile range; that is,

 IQR = Interquartile range = Q3 – Q1

Example 20
Table 3 in Example 5 gave the total compensations (in millions
of dollars) for the year 2010 of the 12 highest-paid CEOs of U.S.
companies. That table is reproduced on the next slide.

(a) Find the values of the three quartiles. Where does the total
compensation of Michael D. White (CEO of DirecTV) fall in
relation to these quartiles?

(b) Find the interquartile range.

Example 20
Example 20: Solution
(a)

By looking at the position of $32.9 million (total compensation of

Michael D. White, CEO of DirecTV), we can state that this value lies
in the bottom 75% of the 2010 total compensation. This value
falls between the second and third quartiles.
Example 20: Solution
(b) The interquartile range is given by the difference between
the values of the third and first quartiles. Thus

IQR = Interquartile range = Q3 – Q1

= 51.5 – 24.05 = $27.45 million
Ex. 21
The following are the ages (in years) of nine employees of an
insurance company:
 47 28 39 51 33 37 59 24 33

(a) Find the values of the three quartiles. Where does the age of
28 years fall in relation to the ages of the employees?

(b) Find the interquartile range.

Percentiles and Percentile Rank
 Percentiles and Percentile Rank
 Calculating Percentiles
 The (approximate) value of the k th percentile, denoted by Pk,
is

 kn 
Pk  Value of the   th term in a ranked data set
 100 

 where k denotes the number of the percentile and n

represents the sample size.
 Example 22
 Refer to the data on total compensations (in millions of
dollars) for the year 2010 of the 12 highest-paid CEOs of U.S.
companies given in Example 20. Find the value of the 60th
percentile. Give a brief interpretation of the 60th percentile.
 Example 22: Solution
 The data arranged in increasing order is as follows:

 21.6 21.7 22.9 25.2 26.5 28.0 28.2 32.6 32.9 70.1 76.1 84.5

 The position of the 60th percentile is

kn (60)(12)
  7.20th term  7th term
100 100
 Example 22: Solution
 The value of the 7.20th term can be approximated by the value
of the 7th term in the ranked data. Therefore,

 P60 = 60th percentile = 28.2 = $28.2 million

 Thus, approximately 60% of these 12 CEOs had 2010 total

compensations less than or equal to $28.2 million.
Percentiles and Percentile Rank
Finding Percentile Rank of a Value

Percentile rank of xi
Number of values less than xi
  100
Total number of values in the data set
 Example 23
 Refer to the data on total compensations (in millions of
dollars) for the year 2010 of the 12 highest-paid CEOs of U.S.
companies given in Example 20. Find the percentile rank for
$26.5 million (2010 total compensation of Alan Mulally, CEO
of Ford Motor). Give a brief interpretation of this percentile
rank.
 Example 23: Solution
 The data on revenues arranged in increasing order is as
follows:

 21.6 21.7 22.9 25.2 26.5 28.0 28.2 32.6 32.9 70.1 76.1 84.5

 In this data set, 4 of the 12 values are less than $26.5 million.
Hence,
 Example 23: Solution
 Rounding this answer to the nearest integral value, we can
state that about 33% of these 12 CEOs had 2010 total
compensations of less than $26.5 million. Hence, 67% of these
12 CEOs had $26.5 million or higher total compensations in
2010.
 BOX-AND-WHISKER PLOT
 Definition
 A plot that shows the center, spread, and skewness of a data
set. It is constructed by drawing a box and two whiskers that
use the median, the first quartile, the third quartile, and the
smallest and the largest values in the data set between the
lower and the upper inner fences.
 Example 24
 The following data are the incomes (in thousands of dollars)
for a sample of 12 households.

 75 69 84 112 74 104 81 90 94 144 79 98

 Construct a box-and-whisker plot for these data.

 Example 24: Solution
 Step 1. First, rank the data in increasing order and calculate
the values of the median, the first quartile, the third quartile,
and the interquartile range. The ranked data are

 69 74 75 79 81 84 90 94 98 104 112 144

 Median = (84 + 90) / 2 = 87

 Q1 = (75 + 79) / 2 = 77
 Q3 = (98 + 104) / 2 = 101
 IQR = Q3 – Q1 = 101 – 77 = 24
 Example 24: Solution
 Step 2. Find the points that are 1.5 x IQR below Q1 and 1.5 x
IQR above Q3.

 1.5 x IQR = 1.5 x 24 = 36

 Lower inner fence = Q1 – 36 = 77 – 36 = 41
 Upper inner fence = Q3 + 36 = 101 + 36 = 137
 Example 24: Solution
 Step 3. Determine the smallest and the largest values in the
given data set within the two inner fences.

 Smallest value within the two inner fences = 69

 Largest value within the two inner fences = 112
 Example 24: Solution
 Step 4. Draw a horizontal line and mark the income levels
on it such that all the values in the given data set are
covered. The result of this step is shown in Figure 13.
 Example 24: Solution
 Step 5. By drawing two lines, join the points of the
smallest and the largest values within the two inner fences
to the box. These values are 69 and 112 in this example.
This completes the box-and-whisker plot, as shown in
Figure 14.