Handling Missing Data: Business

Problems

Statistical Function

Mean
In statistics, the mean, also known as the arithmetic mean or average, is a
measure of central tendency of a set of numerical values. It is calculated by
adding up all the values in the data set and then dividing the sum by the total
number of values. The formula for calculating the mean is:

Here, m = mean. The mean is a useful tool for summarizing a set of data and
understanding its general properties. It can be affected by extreme values or
outliers, so it is important to consider other measures of central tendency,
such as the median and mode, as well as the variability of the data when
analyzing a dataset.

In this course, you will use the AVERAGE function in Google spreadsheets to
compute the mean.

Here, denotes the mean value and denotes the sum of n values where n
is the number of values in the sample.
Median
The median is a statistical measure that represents the middle value of a
dataset when it is arranged in order of magnitude. It is the value that divides
the data set into two equal halves, such that half of the values are above the
median and half are below it.

To find the median, the data set is first arranged in ascending or descending
order.
1. If the data set contains an odd number of values, then the median is the
middle value. For example, the median for a sorted list of 15
observations is the 8th value.
2. If the data set contains an even number of values, then the median is
the average of the two middle values. For example, the median for a
sorted list of 16 observations is the average of the 8th and 9th values.

Unlike the mean, the median is not influenced by extreme values or outliers in
the data set, making it a useful measure of central tendency in skewed or
asymmetric distributions. A skewed or asymmetric distribution is a type of
data distribution where the values are not evenly spread out around the
average or middle of the data. In this type of distribution, the data tends to be
concentrated on one side of the center, and the other side has fewer values
that are more spread out.

In this course, you will use the MEDIAN function in Google spreadsheets to
compute the mean.

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Mode
In statistics, the mode is a measure of central tendency that represents the
most frequent value in a dataset. More specifically, the mode is the value that
occurs with the highest frequency in a set of observations or data points. It is
one of the three main measures of central tendency, along with the mean and
median.

The mode is particularly useful when dealing with categorical or discrete data,
such as the number of times a certain event occurs, or the most common color
of cars in a parking lot. It is also useful when dealing with continuous data that
can be grouped into categories or bins.

Unlike the mean and median, the mode does not take into account the actual
values of the data, only their frequency of occurrence. This makes it less
sensitive to outliers or extreme values that may affect the mean or median.
However, it may not be a representative measure of central tendency if there
are multiple modes in the dataset or if the frequency of the modes is close to
each other. You can use the MODE function to compute the mode.

Variance
In statistics, variance is a measure of how spread out a dataset is. More
specifically, it measures the average squared difference between each data
point and the mean of the dataset. Variance is represented by the symbol σ²
for a population and s² for a sample.
Variance is commonly used in statistics to describe the variability or spread of
a dataset. It is a useful tool for comparing the spread of two or more datasets,
as well as for identifying outliers or extreme values in a dataset.

The formula for variance depends on whether you are calculating the
variance of a population or a sample.

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• Population Variance (σ²)
The population variance is calculated using the following formula:

σ² = Σ(x - μ)² / N
o σ² represents the population variance
o x represents each data point in the dataset
o μ represents the population mean
o N represents the total number of data points in the dataset

This formula calculates the average squared difference between each

data point and the population mean.

• Sample Variance (s²)

The sample variance is calculated using a similar formula, but with n-1 in the
denominator instead of N to account for the fact that the sample mean is an
estimate of the population mean:

s² = Σ(x - x̄)² / (n-1)

o s² represents the sample variance
o x represents each data point in the dataset
o x̄ represents the sample mean
o n represents the sample size

This formula calculates the average squared difference between each

data point and the sample mean.

Both formulas involve squaring the differences between each data point and
the mean, which gives more weight to larger differences and emphasizes the
spread of the dataset. The result is a measure of how much the data points in
a dataset vary from the mean. Google Spreadsheets use the sample variance
formula. You can use the VAR function to compute the variance.

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Standard Deviation
Standard deviation is a statistical measure that is used to quantify the amount
of variability or dispersion in a set of data. It is defined as the square root of
the variance and is typically denoted by the symbol σ (sigma).
The standard deviation tells us how spread out the data is from the mean, or
average, value. A low standard deviation means that the data points tend to
be close to the mean, while a high standard deviation means that the data
points are spread out over a wider range.
To calculate the standard deviation, first find the mean of the data set. Then,
for each data point, subtract the mean and square the result. Next, find the
average of these squared differences, which is the variance. Finally, take the
square root of the variance to get the standard deviation. The formula for the
standard deviation is:

The higher the standard deviation the more variability or spread you have in
your data. The larger your standard deviation, the more spread or variation
in your data. Small standard deviations mean that most of your data is
clustered around the mean.

As you can see in the graph When Low standard deviation values are clustered
around the mean but in another case, the values are spread. You can use
STDEV function to compute the standard deviation.

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How to impute missing values?
1. If the Standard deviation is similar/ near to Average or bigger value, then
we replace the missing value with Median
2. If the Standard deviation is less than the average value or has a small
value that means values are clustered near to Average, then we replace
the missing value with the Average

Here is the implementation of all the mentioned statistical operations

in a given Student dataset

Statistical operations were performed using the “Marks” column in the dataset

Read More
• https://support.google.com/docs/answer/3094063?hl=en