Chapter One

Statistics Refresher
1. Measures of central tendency
Mean -Quartiles
Median -Deciles
Mode -Percentiles
a. Mean
1. Weighted Arithmetic Mean
PQ
n ( N −n
N −1 )
E.g. Suppose Mr. A has taken six courses in the first semester: English, FAI, Mathematics, Statistics, IT
and Management. The following table shows each course’s credit hours with Mr. A’s result
No Course Name Cr. Hrs Score
1 English 3 B+
2 FAI 4 A-
3 Mathematics 3 B
4 Statistics 3 B
5 IT 2 C+
6 Management 3 A
Required: Compute the student’s CGPA
2. The Geometric Mean

Geometric Mean for growth rate = √

n
( 1+ x 1 )∗( 1+ x 2 )∗( 1+ x 3 )∗… .. ( 1+ xn ) - 1
Example consider the following growth rate: 10%, 6%, 14%, 5%
Required: find GM

√4 ( 1+0.1 )∗(1+ 0.06 )∗(1+ 0.14 )∗(1+0.05) - 1 = 0.0869

Average percent increase overtime GM =

√
n Value at end of period
Value at beginning of period
−1

Example: The population of Hawassa town in 1998 was 20,000 people; by 2008 it was 220,000 people.
What is the average annual rate of percentage increase during the period?
Solution: There are 10 years between 1998 and 2008 so n = 10. The average percent increase overtime
formula for the geometric mean as applied to this type of problem is:

GM =
√
n Value at end of period
Value at beginning of period
−1

¿
√
10 220,000
20,000
−1=1.271−1=0.271

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The final value is 0.271. So, the annual rate of increase is 27.1 percent. This means that the rate of
population growth in Hawassa is 27.1 percent per year.
b. The median

( )
th
n+ 1
Median = 2 element if n is odd.

() ( )
th th
n n
+ + 1
2 2
= 2 element if n is even.
Example: Suppose we have the following series: 15, 19, 21, 7, 33, 25, 18 and 5
We have to first arrange it in either ascending or descending order. These figures are arranged in an
ascending order as follows:
5, 7, 10, 15, 18, 19, 21, 25, 33
Now as the series consists of odd number of items, to find out the value of the middle item, we use the
formula

( ) ( )
th th
n+ 1 9+ 1
Median = 2 = 2
= 5th element if n is odd.
That is the size of the 5th item is the median. This happens to be 18.
Example 2: Suppose the series consists of 15, 19, 21, 7, 33, 25, 18, 5 and 23
We have to first arrange it in either ascending or descending order. These figures are arranged in an
ascending order Thus, the series is now 5, 7, 10, 15, 18, 19, 21, 23, 25, and 33.
Now as the series consists of even number of items, to find out the value of the middle item, we use the
formula

() ( ) ( ) ( )
th th th th
n n 10 10
+ + 1 + + 1
2 2 2 2
Median = 2 = 2
= 5.5th Here, we have to take the average
of the values of 5th and 6th item. This means an average of 18 and 19, which gives the median as 18.5.
Determination of Median in grouped (a Continuous) Frequency Distribution
Steps to find the median of a grouped frequency distribution
1. Prepare a cumulative frequency distribution.
2. Find the class where the median is located. It is the lowest class for which the
cumulative frequency equals or exceeds N/2.
In the case of a continuous frequency distribution, we first locate the median class by cumulating the

( )
th
N
frequencies until 2 point is reached. Finally, the median is calculated by with the help of the
following formula:
N
−CF) (
2
Median=LCB + xW
f

2
Where,
CF = cumulative frequency of the class preceding the median class
f = is frequency of the median class,
LCB = is lower class boundary of median class and
W= class width of median class
Let us take an example of a frequency distribution for which the median is to be calculated.
Wages (Birr) 800-1,000 1,000-1,200 1,200-1,400 1,400-1,600 1,600-1,800 1,800-2,000
No. of Workers 18 25 30 34 26 10
Solution: In order to calculate median in this case, we have to first provide cumulative frequency to the
table. Thus, the table with the cumulative frequency is written as:
Monthly Wages Frequency Cumulative Frequency
800--1,000 18 18
1,000--1,200 25 43
1,200--1,400 30 73
1,400--1,600 34 107
1,600--1,800 26 133
1,800--2,000 10 143
N 143
= =71 . 5th
Now, Median is the value of 2 2 item, which lies in the class (1,200-1,400). Thus (1,200-
1,400) is the median class. For determining the median in this class, we use interpolation formula as
follows:

Median = L C b +
[ N
2
− Cf ] w 71 .5−43
( 200 )
f mc =1200+ 30 =1390 birr
1. The Mode ( ^
X)
The mode is another measure of central tendency. It is the value at the point around which the items are
most heavily concentrated. A given set of data may have
 One mode – uni model e.g. A=3 ,3,7,6,2,1 ^ X =3
 Two mode – Bi – modal e.g. 10,10,9,9,6,3,2,1 ^X = 10 and 9
 More than two mode- multi modal e.g. 5,5,5,6,6,6,8,8,8,2,3,2 ^
X =5,6,8
 May not exist at all e.g. 1,3,2,4,5,6,7,8 no modal value
As an example, consider the following series: 8, 9, 11, 15, 16, 12, 15, 3, 7, 15
There are ten observations in the series where in the figure 15 occurs maximum number of times- three.
The mode is therefore 15.
In case of un grouped discrete frequency distribution, mode is the value of the variable corresponding to
the maximum frequency
Example: Consider the following distribution, then determine modal value of the distribution.
X 1 2 3 4 5 6 7 8 9
F 3 1 18 25 40 30 22 10 6
Solution: The maximum frequency is 40 and therefore the corresponding value of X=5 is the value of
mode.

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In the case of grouped data, mode is determined by the following formula:

^
Mode ( X ¿ ¿ =
lo +
(( f 1 − f0
f 1 − f 0 ) + ( f 1 − f 2) ) w

Where
lo
= is the lower value of the class in which the mode lie.
f1 = is the frequency of the class in which the mode lie.
f0 = is the frequency of the class preceding the modal class.
f2 = is the frequency of the class success ding the modal class.
w = is the class width of the modal class.
So, to determine modal value of the above distribution by using this formula
Example: Let us take the following frequency distribution:
Class intervals Frequency
30-40 4
40-50 6
50-60 8
60-70 12
70-80 9
80-90 7
90-100 4
We have to calculate the mode in respect of this series.
Solution: We can see from Column (2) of the table that the maximum frequency of 12 lies in the class-
interval of 60-70. This suggests that the mode lies in this class-interval. Applying the formula given
earlier, we get:
12−8
Mode=60+ ×10 60+ 4 ×10
( 12−8 ) + ( 12−9 ) = 4 +3 =65.7 approx.
Quartiles, Deciles and Percentiles
I. Ungrouped Data
Quartiles for ungrouped data:-

( ) item Where, k = 1,2,3

th
K ( n+1 )
i. Odd Qk =
4

(( ) )
th
kn kn
+ +1
ii. Even QK = 4 4
item
2
Deciles

( ) item Where, i = 1,2,3…….9

th
i ( n+ 1 )
i. Odd Di =
10

4
 ( )
th

ii. Even Di = ( ¿ + ¿ +1
10 10 ) item
2
Percentiles

( ) item Where, t = 1,2,3,….99

th
i ( n+ 1 )
i. Odd Pt =
100

(( ) )
th
tn tn
+ +1
ii. Even Pt = 100 100
item
2
Example: Use the following distribution to calculate quartiles, deciles and percentiles
8, 12, 6, 4, 16, 14, 10
Required: Find Q2, Q3, D3, D5, P20, P50
Solution:- n = 7 which is odd Q2 implies k = 2, D3 implies i = 3……….
 Arrange the data either from smallest to largest or from largest to smallest
4, 6, 8, 10, 12, 14, 16

( ) item = 16/4 i.e. 4 item 10, therefore, Q = 10 which is equal with median.
th
2 (7 +1 ) th
Q2 = 2
4

Q =(
4 )
th
3 ( 7+1 )
3 item = 6 item which is 14, therefore, Q = 14
th
3

D =(
10 )
th
3 ( 7+1 )
3 item = 2.4 item. Hence D is found between 2 and 3 item i.e. 6 and 8
th
3
nd th

nd rd nd
= 2 item + 0.4 (3 item - 2 item)
D =(
10 )
th
5 ( 7+1 )
item = 4 item which is 10
5
th
= 6 + 0.4(8-6)

P = (
100 )
= 6 + 0.8 20 ( 7+1 )
th
item = 1.6 item, which is found
20
th

= 6.8
between
the 1st and 2nd item.
= 1st item + 0.6(2nd item – 1st item)
= 4 + 0.6(6-4), = 5.2

( 50100 ) item = 4 item which is 10

th
( 7+1 ) th
P50 =
 For even data set (Find Q3, D6, P72)
≈ Now let add one item on the above example to make it even (18)

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 Arrange the data from smallest to largest
4, 6, 8, 10, 12, 14, 16, 18 n=8

( ( ) ) ( ( ) )
th th
3(8) 3(8) 24 24
+ +1 + +1
Q3 = 4 4 = 4 4 = 6 +7/2 = 6.5th item
item item
2 2

= 6th item + 0.5(7th item -6 item)

= 14 + 0.5(16-14)
= 15

(( ) )
th
6 (8) 6(8)
+ +1
D6 = 10 10 = 5.3th item, found between 5th and 6th item
item
2
= 5th item + 0.3(6th item – 5th item)
= 12 + 0.3(14 – 12)
= 12.6

( ( ) )
th
72(8) 72(8)
+ +1
P72 = 100 100 = 6.26th item, found between 6th and 7th item
item
2
= 6th item + 0.26(7th item – 6th item)
= 14 + 0.26(16 – 14)
= 14.52
II. Grouped Data
a. Quartiles
Step 1: Prepare cumulative frequency

( )
th
kn
Step 2: Identify the quartile class (Qk class = )
4
kn
−cf
4 Where, k = 1, 2, 3
Q K =L+ .w
f
L = lower limit of quartile class
cf = Cum. frequency of a class that precede a quartile class
w = width of quartile class
Example:
Class 2-4 4-6 6-8 8-10
Frequenc 3 4 2 1

6
 y

Required: Find Q3, D7, P20

≈ First prepare cumulative frequency
≈ Identify quartile class

Class 2-4 4-6 6-8 8-10

Frequenc 3 4 2 1
y
Cf 3 7 9 10

Q3 class = ¿ ¿ = 7.5th value of the observation in cumulative class column.

It lies in the 6-8 class.

3(10)
−7
4 = 6.5
Q 3=6 + .2
2

b. Deciles

¿ −cf
10
Di=L+ .w
f
Use the above data and find D7
Step 1: Prepare cumulative frequency (already prepared)
th

( )
Step 2: Identify the decile class (Di class =
¿
10
)

( )
th
7(10)
D7 class = = 7th value of the observation in the cf column. It is found in the second class
10
(4-6).
7(10)
−3
10 =6
D 7=4+ .2
4
c. Percentiles
tn
−cf
100
Pt =L+ .w
f
Use the above data and find P20
Step 1: Prepare cumulative frequency (already prepared)

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 ( )
th
tn
Step 2: Identify the percentile class (Pt class = )
100

( )
th
20(10)
P20 class = = 2, it is found in the first class 2-4
100

2−0
P20=2+ .2 = 3.33
3
Measures of dispersion
 Range,
 Variance, and
 Standard deviation.
 Mean Division
1. Range
R = highest value - lowest value
Example 1: Suppose the scores of a student on seven examinations were 5, 10,20, 7, 33, 60 and 68, find
the Range.
Solution R = 68-5 = 63

2. Variance
 The population variance is denoted by the Greek symbol σ2.
 For a population of N observations and
 with μ denoting the population mean.
Population variance σ2 ¿ ¿ ¿
Sample variance s2 ¿ ¿ ¿
3. Standard Deviation

Population standard deviation σ = √ δ 2 Sample standard deviation S= S √ 2

Exercise: Find variance and standard deviation of the following sampled data set.
43, 56, 40, 38, 35, 42, 48, 50, 44
Measures of Dispersion for Data Grouped into a Frequency Distribution
Range
Hourly Earnings Number
50 -100 6
100-150 12
150 -200 19
200-250 7
250-300 3
The range is Birr 250, found by Birr 300 – 50.
Variance and Standard Deviation

Hourly Earnings Frequency (f) Mid-point(X) X2 fX2 fX

8
 50 -100 6 75 5,625 33,750 450
100-150 12 125 15,625 187,500 1,500
150 -200 19 175 30,625 581,875 3,325
200-250 7 225 50,625 354,375 1,575
250-300 3 275 75,625 226,875 825
2
∑fX = 1,384,375 ∑fX = 7675
Variance
2 2
S =∑ f x −¿ ¿ ¿
2
S =1384375−¿ ¿ ¿ = 2,849.22
Standard Deviation

S= √ ∑ fX 2−¿ ¿ ¿ ¿ ¿ ¿

= √ 2849.22
= 53.37