Well, in this particular case the mean and median give similar numbers.īut let's see what happens if we extend the list of wages by including a celebrity who earns, say, about $30 million/year, which is roughly $14,500/hour. The median wage is $47/hour, and it is the police officer who earns it (1/2 wages are lower, and 1/2 are higher). Now, let's calculate the average (mean): add up the above numbers and divide by 5: (20+26+47+54+63)/5=42. Please have a look at a few sample salaries for common jobs: Why? The best way to understand this would be from an example. Since the mean is greatly affected by skewed data and outliers (non-typical values that are significantly different from the rest of the data), median is the preferred measure of central tendency for an asymmetrical distribution.įor instance, it is generally accepted that the median is better than the mean for calculating a typical salary. For a skewed distribution (where there are a small number of extremely high or low values), the three measures of central tendency may be different. Which measure to use mostly depends on the type of data you are working with as well as your understanding of the "typical value" you are attempting to estimate.įor a symmetrical distribution (in which values occur at regular frequencies), the mean, median and mode are the same. Generally, there is no "best" measure of central tendency. In situations when there are two or more modes in your data set, the Excel MODE function will return the lowest mode. For our sample data set, the formula goes as follows: In Microsoft Excel, you can calculate a mode by using the function of the same name, the MODE function. The mean is calculated by adding up a group of numbers and then dividing the sum by the count of those numbers.įor example, to calculate the mean of numbers is 2. Arithmetic mean, also referred to as average, is probably the measure you are most familiar with.
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