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Statistics Class 11 Economics

Central Tendency


A measure of central tendency denotes a value that represents a statistical series, typically a single or representative value. This value is chosen as it is the one to which the majority of observations are closest.

Question for Chapter Notes: Statistics
Try yourself:Which of the following is NOT a measure of central tendency?
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Arithmetic Mean


The Arithmetic Mean, denoted by X, is calculated by adding up all the values in a series and dividing the sum by the total number of items in the series. This calculation can be represented by the following formula.
Statistics Class 11 Economics

Objectives of Average

  • To present a brief picture of data: The use of an average allows for a concise representation of data, making it simpler to comprehend and recall.
  • To make comparisons easier: Averages are useful for facilitating comparisons between data sets, as they condense the information into a single value.
  • To help in decision-making: The majority of research and planning decisions are founded on the average value of specific variables.
  • To help in formulation of policies: Averages play a significant role in policy formulation, such as the consideration of per capita income by the Indian government in its efforts to alleviate poverty.

Merits and Demerits of Arithmetic Mean


(i) The following are some of the merits of using arithmetic mean:

  • Easy to compute: Its calculation is straightforward, requiring only basic mathematical operations such as addition, multiplication, and division.
  • Simple to understand: The concept of arithmetic mean is easy to grasp, as it represents the value per unit or cost per unit.
  • Based on all items: It takes into account all values within the data set, providing a more comprehensive representation of the distribution.
  • Rigidly defined: The value of arithmetic mean is always definite, as it is rigidly defined.
  • Good basis of comparison: Arithmetic mean serves as a reliable basis for comparing two or more groups of data.
  • Algebraic treatment: It is capable of undergoing further algebraic manipulation, making it a commonly used tool in advanced statistical analyses.

(ii) The following are some of the demerits of arithmetic mean:

  • Complete data is required: The arithmetic mean requires the availability of all items in a series for computation.
  • Affected by extreme values: Extreme values can have a significant impact on the calculation of the arithmetic mean, as it is based on all items in the series.
  • Absurd results: There may be instances where the arithmetic mean yields illogical or absurd results, such as when the mean of the number of students in a class is reported as a decimal value.
  • Calculation of mean by observation is not possible: Unlike median or mode, the arithmetic mean cannot be determined through simple observation of the series.
  • No graphic representation: The arithmetic mean cannot be visually represented on a graph.
  • Not possible in case of an open-ended frequency distribution: It is not feasible to calculate the arithmetic mean for an open-ended frequency distribution without making an assumption regarding the class size.
  • Not possible in case of qualitative characteristics: The computation of arithmetic mean is not applicable to qualitative data, such as information related to intelligence, honesty, smoking habits, etc.

Types of Arithmetic Mean

  • Simple arithmetic mean
  • Weighted arithmetic mean

Methods of Calculating Simple Arithmetic Mean
(i) Individual Series: For individual series, the Arithmetic Mean can be computed using two methods:

  • Direct Method: This approach entails calculating the Arithmetic Mean using the formula:
    Statistics Class 11 Economics
  • Short-cut Method: An alternative method involves using the following formula:
    Statistics Class 11 Economics
    In this formula, Statistics Class 11 Economics represents the Arithmetic Mean, "A" represents the assumed average of "Ed," which is the net sum of the deviations of the various values from the assumed average, and "N" refers to the number of items in the series.

(ii) Discrete Series: There are three methods of calculating mean of the discrete series

  • Direct Method: Direct method of estimating mean of the discrete frequency series uses the formula
    Statistics Class 11 Economics
  • Short-cut Method: Short cut method of estimating mean of the discrete frequency series uses the following formula
    Statistics Class 11 Economics
  • Step-deviation Method: This method is a variant of short-cut method. It is adopted when deviations from the assumed mean have some common factor
    Statistics Class 11 Economics

(iii) Frequency Distribution: There are three methods of calculating mean in frequency distribution

  • Direct Method: Direct method of estimating mean of the discrete frequency series uses the formula
    Statistics Class 11 Economics
    m = mid-value, mid-value = Statistics Class 11 Economics
    L1 = lower limit of the class
    L2 = upper limit of the class
  • Short-cut Method: Short cut method of estimating mean of the frequency distribution uses the formula
    Statistics Class 11 Economics
  • Step Deviation Method: According to this method, we find the Arithmetic Mean by the following formula
    Statistics Class 11 Economics
  • Weighted Arithmetic Mean: It is the mean of weighted items of the series. Different items are accorded different weights depending on their relative importance. The weighted sum of the items is divided by the sum of the weights.

Calculation of Weighted Mean
According to this way, we find weighted mean from the following information

Statistics Class 11 Economics

(i) Merits

  • Simplicity
  • Certainty
  • Based on all items
  • Algebraic treatment
  • Stability
  • Basis of comparison
  • Accuracy test

(ii) Demerits

  • Effect of extreme value
  • Mean value may not figure in the series at all
  • Laughable conclusions
  • Unsuitability
  • Misleading conclusions

Median


The Median is defined as the value of the variable that separates the group into two equal parts. Specifically, one part encompasses all values greater than the Median, while the other part consists of all values smaller than the Median.

Calculation of Median

  • Individual Series: Calculation of Median in individual series involves the following formula M = Size of  item Statistics Class 11 Economics 
    When N of the series is an even number, Median is estimated using the following formula
    Statistics Class 11 Economics
  • Discrete Series: Calculation of Median in case of discrete series or frequency array involves the following formula
    M = Size of Statistics Class 11 Economics item
  • Frequency Distribution Series: The following formula is applied to determine the Median Value
    Statistics Class 11 Economics

Question for Chapter Notes: Statistics
Try yourself:What does the median represent in a data set?
View Solution

Merits of median

  • The Median is simple to comprehend and calculate.
  • It is less likely to be influenced by extreme observations.
  • The Median can be determined graphically using ogives.
  • In the case of open-ended classes, the Median is the most suitable average.
  • For qualitative measurements such as intelligence or beauty, the Median is the most appropriate average.
  • The Median is a positional value, not a computed value.

Demerits of Median

  • As a positional average, the Median does not rely on all observations in the series.
  • Arranging the data is necessary to determine the Median, unlike other averages.
  • The Median cannot be precisely calculated if the series has an even number of items.

Quartiles


A quartile is defined as one of the three points that divide a statistical series into four equal parts, with each part representing a quarter of the whole data set.
Calculation of Quartiles Quartile values (Q1 and Q3) are estimated differently for different sets of series,
(i) Individual and Discrete Series
Statistics Class 11 Economics
(ii) Frequency Distribution Series In frequency distribution series, the class interval of Q1 and Q3 are first identified as under
Statistics Class 11 Economics
or
Statistics Class 11 Economics

Percentiles


Percentiles divide the series into 100 equal parts, and is generally expressed as P.
Percentiles are estimated for different types of series as under
(i) Individual and Discrete Series
Statistics Class 11 Economics
(ii) Frequency Distribution Series
Statistics Class 11 Economics

Mode 


The mode of a series is the value that appears most frequently in the series, and its corresponding frequency is the highest among all values in the series.

Merits of mode:

  • Mode is a popular and simple measure of central tendency.
  • It can be graphically located using a histogram.
  • It is less affected by marginal values.
  • All the items of a series are not required to be known for computing mode.
  • It is the most representative value in a series.
  • It is less affected by extreme values.

Demerits of mode:

  • It is an uncertain measure.
  • It is not capable of algebraic treatment.
  • Procedure of grouping is complex.
  • It is not based on all observations.
  • For bi- modal and tri-modal series, it is difficult to calculate.
  • Its value is not based on each and every item of the series.
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FAQs on Statistics Class 11 Economics

1. What is central tendency in statistics?
Central tendency in statistics refers to the measure that represents the center or typical value of a data set. It provides a single value that summarizes the entire data set. Common measures of central tendency include the arithmetic mean, median, and mode.
2. What is the arithmetic mean?
The arithmetic mean, also known as the average, is a measure of central tendency calculated by adding up all the values in a data set and then dividing the sum by the number of values. It is commonly used to find the typical value of a data set.
3. What is the median?
The median is a measure of central tendency that represents the middle value of a data set when it is arranged in ascending or descending order. It is the value that separates the higher half from the lower half of the data. If there is an even number of values, the median is the average of the two middle values.
4. What are quartiles?
Quartiles are values that divide a data set into four equal parts. The first quartile (Q1) is the value below which 25% of the data falls, the second quartile (Q2) is the same as the median, and the third quartile (Q3) is the value below which 75% of the data falls. Quartiles are useful for understanding the spread of data and identifying outliers.
5. What are percentiles?
Percentiles are values that divide a data set into 100 equal parts. They represent the relative standing of a particular value within the entire data set. For example, the 75th percentile is the value below which 75% of the data falls. Percentiles are often used to compare an individual's performance or rank in relation to others in a given population.
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