Lecture-6

Measures of Location

The purpose of a measure of location is to pinpoint the center of a set of

observations.

Measure of location: A single value that summarizes a set

of data. It locates the center of the values.

Different Measures of Location

• Arithmetic Mean (Mean)

• Weighted Mean

• Median

• Mode

• Geometric Mean

Measures of Dispersion

The purpose of a measure of dispersion is to look for the variation or the

spread in the set of observation

Measure of Dispersion: A single value that summarizes the

variation or spread in a set of data. It often helps gauging
the reliability of the other estimates e.g. mean.

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Why Study Dispersion?

For Comparison of Two Datasets

A direct comparison of two sets of data based only on two

measures of location such as the mean and the median can be
misleading since an average does not tell us anything about the
spread of the data.

• Averages does not tell about the dispersion

• Even bearing equal value of mean, two populations may

have entirely different dispersions

Example:

We need to cross a stream in order to reach to an area which

is badly affected with the recent floods.

We are told that the average depth of the stream is 3½ feet.

All our fellows are of good height (average 5½ feet)

If you are leading the team what is your decision about

crossing the stream if none of your fellows know how to
swim?

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However one of the village men tells us that the minimum

depth is 2 feet while the maximum depth is 6½ feet.

What is your decision now about crossing the stream?

Example:

Suppose there are two classes each with six students.

In the morning class (AM) the students' ages are 18, 20, 21,
21, 23, and 23 years.

In the evening class (PM) the ages are 17, 17, 18, 20, 25, and
29 years.

Note that for both classes the mean age is 21 years but there is more
variation or dispersion in the ages of the evening students.

Interpretation of Measurement of Dispersion

• A small value for a measure of dispersion indicates that the data

are clustered closely

• Let’s say, around the arithmetic mean. Thus the mean is considered
representative of the data, that is, it is reliable.

• Conversely, a large measure of dispersion indicates that the mean

is not reliable and is not representative of the data.

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Measures of Dispersion

We will consider several measures of dispersion:

• Range
• Mean Deviation
• Variance
• Standard Deviation

The standard deviation is the most widely used measure of dispersion.

However there are several others measures of location that are used to

describe the variation or dispersion in the data. These measures include

• Quartiles
• Deciles
• Percentiles

Quartiles

We know that median divides data in to two halves (once data has been
placed in order from smallest to largest) So for Median, half the values
are below the median and half are above the median

• If we further divide the lower half of the values and upper half set
of the values into two equal parts, we have quartiles.

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• Quartiles divide a set of data into four equal parts.

First Quartile The point below which one-fourth or 25%

of the ranked data values lie. (It is designated Q1)

Third Quartile The point below which three-fourths or

75% of the ranked data values lie. (It is designated Q3)

Second Quartile The point below which half or 50% of

the ranked data values lie. Logically the median is the
Second Quartile (designated Q2).

The values corresponding to Q1, Q2 and Q3 divide a set of data into four
equal parts.

Deciles

Just as quartiles divide a distribution into 4 equal parts, deciles divide a

distribution into ten equal parts.

Example

• If you are told that your Scholastic Aptitude Test (SAT)

score is in the 9th decile

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• You could assume that 90 percent of those taking the test had
a lower score than yours

• And just 10 percent had a higher score.

Percentiles

Likewise the quartiles that divide the data in to 4 equal parts and the
deciles that divide the data in to 10 equal parts, percentiles divide a
distribution into 100 equal parts.

Example

• A grade point average in the 55th percentile

• Means that 55 percent of students have a lower GPA than yours

• And that 45 percent have a higher GPA.

Finding Quartiles, Deciles and Percentiles

• Order the data from smallest to largest.

• Then use below formula.

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• Use the total number of observations (n) and the values of Quartile,
decile or percentile.

Note that this is a generic formula for percentiles, deciles and

quartiles.

Location of a Percentile
P
L p = (n + 1) [4 − 1]
100

Where:

Lprefers to the location of the desired percentile.

n is the number of observations.

P is the desired percentile

Example

We have a total of 79 observations in an ascending order and we want

to locate the first and third quarter for this data array.

• We know that first quartile (Q1) is such a point below which 25%
of the data observations lie
• The formula for Location of a Percentile works well here i.e.
P
L p = ( n +1)
100
So

25 25
L25 = (n + 1) = (79 + 1) = 20
100 100

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so 20th observation is Q1

• Similarly for the third quartile (Q3)

75 75
L75 = ( n + 1) = (79 + 1) = 60
100 100

so 60th observation is Q3

Example

If we have a set of data with 49 observations in ordered array and

we want to locate the 78th percentile, then let P = 78 and n = 49 so
P
L p = ( n +1)
100

78 78
L78 = (n + 1) = (49 + 1) = 39
100 100

Thus we locate the 39th observation.

If we want to locate the 6th decile, then let P = 60 and

P
L p = ( n +1)
100

60 60
L60 = (n + 1) = (49 + 1) = 30
100 100

Thus we locate the 30th observation.

Note that the 6th decile equals the 60th percentile.

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