Summarising data

Descriptive statistics

• provide a concise and clear way of summarising and exploring data

Numerical measures

are needed to summarise the characteristics of the data

measures of location

Where the centre of data is located

• mean- arithmetic average of all observations

• mode- most frequently observed

• median- middle value in an ordered set of observations

use of measures of location in business

•Sales planning: Average demand per month

•Marketing: Most frequently used advertising type (TV, web, etc.)

•Retail: Most frequently bought items in a store

•Investment: Mean annual return on an investment portfolio

Measures of spread

How much is the data dispersed

• Range- sensitive to extreme values- larger range= results more variable

• interquartile range

• standard deviation- The square root of the variance, denoted by s for a sample.

Variance

Measures how far the observations are spread out around the mean, using squared deviations

• larger variance= returns are more spread out

Measures of Skewness

•How symmetric is the data distribution?

Box and whisker diagrams