Describing Data: Numerical

Measures
Chapter 3

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Learning Objectives
LO3-1Compute and interpret the mean, the median, and
the mode
LO3-2Compute a weighted mean
LO3-3Compute and interpret the geometric mean
LO3-4Compute and interpret the range, variance, and
standard deviation
LO3-5Explain and apply Chebyshev’s theorem and the
Empirical Rule
LO3-6Compute the mean and standard deviation of
grouped data

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Measures of Location
 A measure of location is a value used to describe the
central tendency of a set of data
 Common measures of location
 Mean
 Median
 Mode
 The arithmetic mean is the most widely reported measure
of location

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Population Mean

 A measurable characteristic of a population is a parameter

PARAMETER A characteristic of a population.

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Example: Population Mean

There are 42 exits on I-75 through the state of Kentucky.

Listed below are the distances between exits (in miles).

1. Why is this information a population?

2. What is the mean number of miles between exits?

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Example: Population Mean Continued
There are 42 exits on I-75 through the state of Kentucky. Listed below are
the distances between exits (in miles).

1. Why is this information a population?

This is a population because we are considering all of the exits in Kentucky.

2. What is the mean number of miles between exits?

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Sample Mean

 A measurable characteristic of a sample is a statistic

STATISTIC A characteristic of a sample.

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Example: Sample Mean

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Properties of the Arithmetic Mean
 Interval or ratio scale of measurement is required
 All the data values are used in the calculation
 It is unique
 The sum of the deviations from the mean equals zero
 A weakness of the mean is that it is affected by extreme
values

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The Median

MEDIAN The midpoint of the values after they have been ordered from
the minimum to the maximum values.

Prices Ordered Prices Ordered

from Minimum to from Maximum to
Maximum Minimum
$ 60,000 $ 275,000
65,000 80,000
70,000 Median 70,000
80,000 65,000
275,000 60,000

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Characteristics of the Median
 The median is the value in the middle of a set of ordered
data
 At least the ordinal scale of measurement is required
 It is not influenced by extreme values
 Fifty percent of the observations are larger than the
median
 It is unique to a set of data

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Finding the Median
 To find the median for an even numbered data set
 Sort the observations and calculate the average of the two
middle values

The number of hours a sample of 10 adults used Facebook

last month:

3 5 7 5 9 1 3 9 17 10
Arranging the data in ascending order gives:

1 3 3 5 5 7 9 9 10 17

Thus, the median is 6.

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The Mode
MODE The value of the observation that occurs most frequently.

 Major Characteristics of the mode:

 The mode can be found for nominal level data
 A set of data can have more than one mode

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 Relative Positions of Mean, Median, and Mode

Chart 3-2 A Symmetric Distribution

Chart 3-3 A Positively Skewed Distribution

Chart 3-4 A Negatively Skewed Distribution

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The Weighted Mean
 The weighted mean is found by multiplying each
observation, x, by its corresponding weight, w

 The Carter Construction Company pays its hourly

employees $16.50, $19.00, or $25.00 per hour. There are
26 hourly employees: 14 are paid at the $16.50 rate, 10 at
the $19.00 rate, and 2 at the $25.00 rate.
 What is the mean hourly rate paid for the 26 employees?

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Why Study Dispersion?
 The dispersion is the variation or spread in a set of data
 The range is the difference between the maximum and
minimum values in a set of data
 The formula for range is

 The major characteristics of the range are

 Only two values are used in its calculation
 It is influenced by extreme values
 It is easy to compute and to understand

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Population Variance

 Major characteristics of the variance are:

 All observations are used in the calculation
 The units are somewhat difficult to work with, they are the
original units squared
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Sample Variance

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Example: Sample Variance
The hourly wages for a sample of 5 part-time employees
at Home Depot are: $12, $20, $16, $18, and $19.

The sample mean is $17.

What is the sample variance?

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Standard Deviation

where :
s is the sample standard deviation
x is the value of each observation in the sample
x is the mean of the sample
n is the number of observations in the sample

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Standard Deviation
 The major characteristics of the standard deviation are:
 It is in the same units as the original data
 It is the square root of the average squared distance
from the mean
 It cannot be negative
 It is the most widely used measure of dispersion

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Sample Mean of Grouped Data

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Calculating the Standard Deviation of
Grouped Data
 Applewood Auto Group Frequency Distribution
Compute the standard deviation of the vehicle profits.

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Ethics and Reporting Results
 Useful to know the advantages and disadvantages of
mean, median, and mode as we report statistics and as we
use statistics to make decisions
 Important to maintain an independent and principled point
of view
 Statistical reporting requires objective and honest
communication of any results

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 Describing Data: Displaying and
Exploring Data
Chapter 4

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Learning Objectives
LO4-1Construct and interpret a dot plot
LO4-2Construct and describe a stem-and-leaf display
LO4-3Identify and compute measures of position
LO4-4Construct and analyze a box plot
LO4-5Compute and interpret the coefficient of skewness
LO4-6Create and interpret a scatter diagram
LO4-7Develop and explain a contingency table

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Dot Plots Example
 Use dot plots to compare the two data sets like these of the
number of vehicles serviced last month for two different
dealerships

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Dot Plots Example
 Minitab provides dot plots and summary statistics

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Stem-and-Leaf Displays
 An alternative to a frequency distribution and histogram
 The advantages of the stem-and-leaf display
 The identity of the each observation is not lost
 The digits themselves give a picture of the distribution
 The cumulative frequencies are also shown

STEM-AND-LEAF DISPLAY A statistical technique to present a set of

data. Each numerical value is divided into two parts. The leading digit
becomes the stem and the trailing digit the leaf. The stems are located
along the vertical axis, and the leaf values are stacked against each other
along the horizontal axis.

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Stem-and-Leaf Display Example

New Table 4-1on page 98 goes here along with

the final table at the top of page 99.

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Stem-and-Leaf Display Example

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Stem-and-Leaf Display Example

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Measures of Position
 Measures of location also describes the shape of the
distribution and can be expressed as percentiles

 Quartiles divide a set of observations into four equal parts

 The interquartile range is the difference between the
third quartile and the first quartile
 Deciles divide a set of observations into 10 equal parts
 Percentiles divide a set of observations into 100 equal
parts

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Measures of Position Example
 Morgan Stanley is an investment company with offices
located throughout the United States. Listed below are the
commissions earned last month by a sample of 15 brokers.

$2,038 $1,758 $1,721 $1,637 $2,097 $2,047 $2,205 $1,787 $2,287

1,940 2,311 2,054 2,406 1,471 1,460

 First, sort the data from smallest to largest

$1,460 $1,471 $1,637 $1,721 $1,758 $1,787 $1,940 $2,038

2,047 2,054 2,097 2,205 2,287 2,311 2,406

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Measures of Position Example
 Next, find the median
 L50 = (15+1)*50/100 = 8
 So the median is $2,038, the value at position 8

25 75
L25 =(15 +1) =4 L75 =(15 +1) =12
100 100
Therefore, the first and third quartiles are located at the 4th and 12th
positions, respectively: L25 =$1, 721; L75 =$2, 205

$1,460 $1,471 $1,637 $1,721 $1,758 $1,787 $1,940 $2,038

2,047 2,054 2,097 2,205 2,287 2,311 2,406

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Measures of Position Example
 Suppose a data set contained the six values 91, 75, 61, 101, 43,
and 104. We want to locate the first quartile. We order the values
from the minimum to the maximum: 43, 61, 75, 91, 101, and
104. The first quartile is located at
L25=(n+1)P100=(6+1)25100=1.75
 The position formula tells us that the first quartile is located
between the first and the second values and it is .75 of the
distance between the first and the second values. The first value
is 43 and the second is 61. So the distance between these two
values is 18. To locate the first quartile, we need to move .75 of
the distance between the first and second values, so .75(18) =
13.5. To complete the procedure, we add 13.5 to the first value,
43, and report that the first quartile is 56.5.
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Box Plots
 A box plot is a graphical display using quartiles
 A box plot is based on five statistics:
 Minimum value
 1st quartile
 Median
 3rd quartile
 Maximum value
 The interquartile range is Q3 – Q1
 Outliers are values that are inconsistent with the rest of the
data and are identified with asterisks in box plots

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Box Plot Example
 Alexander’s Pizza offers free delivery of its pizza within
15 miles. How long does a typical delivery take? Within
what range will most deliveries be completed?
 Using a sample of 20 deliveries, Alexander determined the
following:
 Minimum value = 13 minutes
 Q1 = 15 minutes
 Median = 18 minutes
 Q3 = 22 minutes
 Maximum value = 30 minutes
 Develop a box plot for delivery times
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Box Plot Example Continued
 Begin by drawing a number line using an appropriate
scale
 Next, draw a box that begins at Q1 (15 minutes) and ends
at Q3 (22 minutes)
 Draw a vertical line at the median (18 minutes)
 Extend a horizontal line out from Q3 to the maximum
value (30 minutes) and out from Q1 to the minimum value
(13 minutes)

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Common Shapes of Data

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Skewness
 The coefficient of skewness is a measure of the symmetry
of a distribution
 Two formulas for coefficient of skewness

 The coefficient of skewness can range from -3 to +3

 A value near -3 indicates considerable negative skewness
 A value of 1.63 indicates moderate positive skewness
 A value of 0 means the distribution is symmetrical

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Skewness Example
 Following are the earnings per share for a sample of
15 software companies for the year 2016. The
earnings per share are arranged from smallest to
largest.

 Begin by finding the mean, median, and standard

deviation. Find the coefficient of skewness.

 What do you conclude about the shape of the

distribution?

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Skewness Example
Step 1 : Compute the Mean

X 
X 
$74.26
 $4.95
n 15

Step 2 : Compute the Standard Deviation

s

 XX  2


($0.09  $4.95)2  ...  ($16.40  $4.95)2 )
 $5.22
n 1 15  1

Step 3 : Find the Median

The middle value in the set of data, arranged from smallest to largest is 3.18

Step 4 : Compute the Skewness

3( X  Median ) 3($4.95  $3.18)
sk    1.017
s $5.22

 What do you conclude about the shape of the distribution?

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Describing the Relationship Between Two
Variables
 A scatter diagram is a graphical tool to portray the
relationship between two variables or bivariate data
 Both variables are measured with interval or ratio level
scale
 If the scatter of points moves from the lower left to the
upper right, the variables under consideration are directly
or positively related
 If the scatter of points moves from the upper left to the
lower right, the variables are inversely or negatively
related

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Scatter Diagrams

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Contingency Tables
 A contingency table is used to classify nominal scale
observations according to two characteristics

CONTINGENCY TABLE A table used to classify observations

according to two identifiable characteristics.

 It is a cross-tabulation that simultaneously summarizes

two variables of interest
 Both variables need only be nominal or ordinal

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Contingency Table Example
 Applewood Auto Group’s profit comparison

 90 of the 180 cars sold had a profit above the median and
half below. This meets the definition of median.
 The percentage of profits above the median are Kane
48%, Olean 50%, Sheffield 42% , and Tionesta 60%.

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