023. Selecting the Appropriate Measure of Central Tendency

The chosen measure might depend on the nature of the data or the manner in which that data are used.

For Example, Land’s End, a popular retailer of camping equipment, would benefit little from the knowledge that the average size of the hiking boots they sold was 7.3492. More useful in future business decisions would be knowledge of the Modal size – recognizing that they sold more boots of size 8 than any other.

As another Example, presume Peter is engaged in a study of consumer incomes. The mean income is $80,000. However, a very large majority of the people has incomes around $35,000, but the presence of a few millionaires (outliers) raises the overall mean level. This mean of $80,000 is somewhat misleading in that it doesn’t represent any typical person’s income. If businesses were to base decisions on an average of $80,000, or government was to formulate public policy based on this figure, the results could be far from what they anticipated. Perhaps Peter should report the Median income. He can then rest assured that one-half the people earned incomes above that level and one-half earned incomes below it.

In still another situation, the Mean would serve as the most useful measure of the average. Assume the Land’s End wishes to market a new camping tent. The dimensions of the tent would depend, among other things, on the average height of adults. Experience has shown that the mean serves quite well as measure of central tendency when dealing with products that are built to conform to people’s height. The size of doorways, counter tops in homes and retail businesses, and much of the furniture that is manufactured is based on mean heights.

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