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Measures of Central Tendency and Dispersion

Practice Measures of Central Tendency and Dispersion
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Mean or Median?

Credit: Laura Guerin
Source: CK-12 Foundation
License: CC BY-NC 3.0

Can you be deceived and manipulated by the mean of a data set? When you ask, “What is the average?” does the answer always give you the information you are seeking?

Why It Matters

Suppose you are applying for a job in a large company. During the application process you ask about the “average” salary of the employees. You are pleased with the answer. You are told that on average employees earn $80,000 a year. You accept a position in the company and are told that your salary will be $40,000 a year and in conversation with other employees you discover that others are also earning around $40,000 per year. Were you lied to during the interview process? Well, not exactly.

Credit: Andrew Magill
Source: http://www.flickr.com/photos/amagill/3366720659/
License: CC BY-NC 3.0

When you asked about the average salary of an employee you were given the mean salary, and the salary of the CEO was included. Since the CEO’s salary is very high, it pulled up the mean salary. To be more precise, your question should have been: “What is the median salary of employees?” The mean is sensitive to extreme values, but the median is not. The median is said to be resistant or robust because it is not affected by extreme values. It's important to know the distinctions between the different ways of measuring the "average"!

See for yourself: http://www.youtube.com/watch?v=A7MxGyEaN64

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Image Attributions

  1. [1]^ Credit: Laura Guerin; Source: CK-12 Foundation; License: CC BY-NC 3.0
  2. [2]^ Credit: Andrew Magill; Source: http://www.flickr.com/photos/amagill/3366720659/; License: CC BY-NC 3.0

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