Mode is the value which occurs most frequency. The mode may not exist, and even if it does, it may not be unique.

Similar documents
Chapter 3 Student Lecture Notes 3-1

Measures of Spread IQR and Deviation. For exam X, calculate the mean, median and mode. For exam Y, calculate the mean, median and mode.

Chapter 3 Descriptive Statistics: Numerical Measures Part B

UNIVERSITY OF VICTORIA Midterm June 6, 2018 Solutions

MgtOp 215 Chapter 13 Dr. Ahn

II. Random Variables. Variable Types. Variables Map Outcomes to Numbers

Tests for Two Correlations

02_EBA2eSolutionsChapter2.pdf 02_EBA2e Case Soln Chapter2.pdf

OCR Statistics 1 Working with data. Section 2: Measures of location

Evaluating Performance

Random Variables. b 2.

Probability Distributions. Statistics and Quantitative Analysis U4320. Probability Distributions(cont.) Probability

Which of the following provides the most reasonable approximation to the least squares regression line? (a) y=50+10x (b) Y=50+x (d) Y=1+50x

Linear Combinations of Random Variables and Sampling (100 points)

occurrence of a larger storm than our culvert or bridge is barely capable of handling? (what is The main question is: What is the possibility of

3: Central Limit Theorem, Systematic Errors

PhysicsAndMathsTutor.com

CHAPTER 9 FUNCTIONAL FORMS OF REGRESSION MODELS

Elton, Gruber, Brown, and Goetzmann. Modern Portfolio Theory and Investment Analysis, 7th Edition. Solutions to Text Problems: Chapter 9

The Institute of Chartered Accountants of Sri Lanka

>1 indicates country i has a comparative advantage in production of j; the greater the index, the stronger the advantage. RCA 1 ij

Chapter 5 Student Lecture Notes 5-1

Capability Analysis. Chapter 255. Introduction. Capability Analysis

Survey of Math Test #3 Practice Questions Page 1 of 5

Introduction. Why One-Pass Statistics?

Tests for Two Ordered Categorical Variables

Creating a zero coupon curve by bootstrapping with cubic splines.

Analysis of Variance and Design of Experiments-II

15-451/651: Design & Analysis of Algorithms January 22, 2019 Lecture #3: Amortized Analysis last changed: January 18, 2019

Risk and Return: The Security Markets Line

TCOM501 Networking: Theory & Fundamentals Final Examination Professor Yannis A. Korilis April 26, 2002

Sampling Distributions of OLS Estimators of β 0 and β 1. Monte Carlo Simulations

Copyright 2017 by Taylor Enterprises, Inc., All Rights Reserved. Dr. Wayne A. Taylor

Spatial Variations in Covariates on Marriage and Marital Fertility: Geographically Weighted Regression Analyses in Japan

4. Greek Letters, Value-at-Risk

Notes on experimental uncertainties and their propagation

The Integration of the Israel Labour Force Survey with the National Insurance File

Economic Design of Short-Run CSP-1 Plan Under Linear Inspection Cost

Multifactor Term Structure Models

ECONOMETRICS - FINAL EXAM, 3rd YEAR (GECO & GADE)

Standardization. Stan Becker, PhD Bloomberg School of Public Health

Appendix - Normally Distributed Admissible Choices are Optimal

Appendix for Solving Asset Pricing Models when the Price-Dividend Function is Analytic

Hewlett Packard 10BII Calculator

Physics 4A. Error Analysis or Experimental Uncertainty. Error

/ Computational Genomics. Normalization

Principles of Finance

Simple Regression Theory II 2010 Samuel L. Baker

ECE 586GT: Problem Set 2: Problems and Solutions Uniqueness of Nash equilibria, zero sum games, evolutionary dynamics

Random Variables. 8.1 What is a Random Variable? Announcements: Chapter 8

Applications of Myerson s Lemma

OPERATIONS RESEARCH. Game Theory

- contrast so-called first-best outcome of Lindahl equilibrium with case of private provision through voluntary contributions of households

Elements of Economic Analysis II Lecture VI: Industry Supply

EDC Introduction

Real Exchange Rate Fluctuations, Wage Stickiness and Markup Adjustments

Calibration Methods: Regression & Correlation. Calibration Methods: Regression & Correlation

Available online: 20 Dec 2011

AS MATHEMATICS HOMEWORK S1

Technological inefficiency and the skewness of the error component in stochastic frontier analysis

Microeconomics: BSc Year One Extending Choice Theory

Midterm Exam. Use the end of month price data for the S&P 500 index in the table below to answer the following questions.

A Bootstrap Confidence Limit for Process Capability Indices

Elton, Gruber, Brown and Goetzmann. Modern Portfolio Theory and Investment Analysis, 7th Edition. Solutions to Text Problems: Chapter 4

Introduction. Chapter 7 - An Introduction to Portfolio Management

COMPARISON OF THE ANALYTICAL AND NUMERICAL SOLUTION OF A ONE-DIMENSIONAL NON-STATIONARY COOLING PROBLEM. László Könözsy 1, Mátyás Benke 2

Using Conditional Heteroskedastic

Measures of Dispersion (Range, standard deviation, standard error) Introduction

Evaluation of the Factors Affecting Initial Public offering Underpricing by Newly-accepted Companies into Tehran Stock Exchange

An Application of Alternative Weighting Matrix Collapsing Approaches for Improving Sample Estimates

Midterm Version 2 Solutions

Taxation and Externalities. - Much recent discussion of policy towards externalities, e.g., global warming debate/kyoto

A Comparison of Statistical Methods in Interrupted Time Series Analysis to Estimate an Intervention Effect

Price and Quantity Competition Revisited. Abstract

Fourth report on the consistency of risk weighted assets

Interval Estimation for a Linear Function of. Variances of Nonnormal Distributions. that Utilize the Kurtosis

Number of women 0.15

Lecture Note 2 Time Value of Money

4: SPOT MARKET MODELS

ISyE 512 Chapter 9. CUSUM and EWMA Control Charts. Instructor: Prof. Kaibo Liu. Department of Industrial and Systems Engineering UW-Madison

arxiv: v1 [q-fin.pm] 13 Feb 2018

Notes are not permitted in this examination. Do not turn over until you are told to do so by the Invigilator.

Risk Reduction and Real Estate Portfolio Size

3/3/2014. CDS M Phil Econometrics. Vijayamohanan Pillai N. Truncated standard normal distribution for a = 0.5, 0, and 0.5. CDS Mphil Econometrics

Problem Set 6 Finance 1,

Correlations and Copulas

A Utilitarian Approach of the Rawls s Difference Principle

Chapter 4 Calculation of the weight (W0)

3.1 Measures of Central Tendency

Explaining and Comparing

EXTENSIVE VS. INTENSIVE MARGIN: CHANGING PERSPECTIVE ON THE EMPLOYMENT RATE. and Eliana Viviano (Bank of Italy)

Consumption Based Asset Pricing

Chapter 6 Risk, Return, and the Capital Asset Pricing Model

Domestic Savings and International Capital Flows

Quiz on Deterministic part of course October 22, 2002

MEASURES OF DISPERSION, RELATIVE STANDING AND SHAPE. Dr. Bijaya Bhusan Nanda,

Survey of Math: Chapter 22: Consumer Finance Borrowing Page 1

4.4 Doob s inequalities

THIS PAPER SHOULD NOT BE OPENED UNTIL PERMISSION HAS BEEN GIVEN BY THE INVIGILATOR.

UWB Indoor Delay Profile Model For Residential and Commercial Environments

Transcription:

1.7.4 Mode Mode s the value whch occurs most frequency. The mode may not exst, and even f t does, t may not be unque. For ungrouped data, we smply count the largest frequency of the gven value. If all are of the same frequency, no mode exts. If more than one values have the same largest frequency, then the mode s not unque. Example 7 The value for the mode of the data n Example 5 s 15 (unmodal) Example 8 {,,, 4, 5, 6, 7, 7, 7} Mode = or 7 (Bmodal) For grouped data, the mode can be found by frst dentfy the largest frequency of that class, called modal class, then apply the followng formula on the modal class: mode = d L + ( L L ) 1 1 d1+ d 1 where: L 1 s the lower class boundary of the modal class; d 1 s the dfference of the frequences of the modal class wth the prevous class and s always postve; d s the dfference of the frequences of the modal class wth the followng class and s always postve; L s the upper class boundary of the modal class. Geometrcally the mode can be represented by the followng graph and can be obtaned by usng smlar trangle propertes. The formula can be derved by nterpolaton usng second degree polynomal. 19

Note that the mode s ndependent of extreme values and t may be appled n qualtatve data. 1.7.5 Concluson For symmetrcally dstrbuted data, the mean, medan and mode can be used almost nterchangeably. For moderately skewed dstrbuton data, ther relatonshp can be gven by Mean - Mode 3 (Mean - Medan) Physcally, mean can be nterpreted as the center of gravty of the dstrbuton. Medan dvdes the area of the dstrbuton nto two equal parts and mode s the hghest pont of the dstrbuton. 1.8 Dsperson and Skewness Sometmes mean, medan and mode may not be able to reflect the true pcture of some data. The followng example explans the reason. 0

Example 9 There were two companes, Company A and Company B. Ther salares profles gven n mean, medan and mode were as follow: Company A Company B Mean $30,000 $30,000 Medan $30,000 $30,000 Mode (Nl) (Nl) However, ther detal salary ($) structures could be completely dfferent as that: Company A 5,000 15,000 5,000 35,000 45,000 55,000 Company B 5,000 5,000 5,000 55,000 55,000 55,000 Hence t s necessary to have some measures on how data are scattered. That s, we want to know what s the dsperson, or varablty n a set of data. 1.8.1 Range Range s the dfference between two extreme values. The range s easy to calculate but can not be obtaned f open ended grouped data are gven. 1.8. Decles, Percentle, and Fractle Decle dvdes the dstrbuton nto ten equal parts whle percentle dvdes the dstrbuton nto one hundred equal parts. There are nne decles such that 10% of the data are D 1 ; 0% of the data are D ; and so on. There are 99 percentles such that 1% of the data are P 1 ; % of the data are P ; and so on. Fractle, even more flexble, dvdes the dstrbuton nto a convenence number of parts. 1.8.3 Quartles Quartles are the most commonly used values of poston whch dvdes dstrbuton nto four equal parts such that 5% of the data are Q 1 ; 50% of the data are Q ; 75% of the data are Q 3. The frst quarter s conventonally denoted as Q 1, whle the second and thrd quarters grouped together s Q and the last quarter s Q 3. Note that Q ncludes the medan, contans half of the frequency and excludes extreme values. It s also denoted the value (Q 3 - Q 1 ) / as the Quartle Devaton, Q D, or the semnterquartle range. 1

1.8.4 Mean Absolute Devaton Mean absolute devaton s the mean of the absolute values of all devatons from the mean. Therefore t takes every tem nto account. Mathematcally t s gven as: f x µ f where: f s the frequency of the th tem; x s the value of the th tem or class mark; µ s the arthmetc mean. 1.8.5 Varance and Standard Devaton The varance and standard devaton are two very popular measures of varaton. Ther formulatons are categorzed nto whether to evaluate from a populaton or from a sample. The populaton varance, σ, s the mean of the square of all devatons from the mean. Mathematcally t s gven as: ( x - ) f µ f where: f s the frequency of the th tem; x s the value of the th tem or class mark; µ s the populaton arthmetc mean. The populaton standard devaton σ s defned as σ = σ. The sample varance, denoted as s gves: f ( x x) ( f ) 1 where: f s the frequency of the th tem; x s the value of the th tem or class mark; x s the sample arthmetc mean. The sample standard devaton, s, s defned as s = For ungrouped data, s. ( x x) x ( x) / Σ Σ Σ s = = n 1 n 1 n

For grouped data, ( Σfx) Σf Σf( x x) Σfx s = = Σf 1 Σf 1 where f = n Note that when calculatng the sample varance, we have to subtract 1 from the total frequency whch appears n the denomnator. Although when the total frequency s large, s σ, the subtracton of 1 s very mportant. Example 10 Measures of Grouped Data (Refers to the followngs Data Set) Gas Frequency Class Class fx fx Consumpton ( f ) boundary mark ( x ) 10 19 1 9.5 19.5 14.5 14.5 10.5 0 9 0 19.5 9.5 4.5 0 0 30 39 1 9.5 39.5 34.5 34.5 1190.5 40 49 4 39.5 49.5 44.5 178 791 50 59 7 49.5 59.5 54.5 381.5 0791.75 60 69 16 59.5 69.5 64.5 103 66564 70 79 19 69.5 79.5 74.5 1415.5 105454.8 80 89 0 79.5 89.5 84.5 1690 14805 90 99 17 89.5 99.5 94.5 1606.5 151814.3 100 109 11 99.5 109.5 104.5 1149.5 101.8 110 119 3 109.5 119.5 114.5 343.5 39330.75 10 19 1 119.5 19.5 14.5 14.5 15500.5 1. x x f =, n = f n 1 14.5 + 0 4.5 + + 1 14.5 = 100 = 79.7 100 7970 671705 3

. 3. 50 48 medan = 79.5 + 10 = 80.5 0 5 13 Q1 = 59.5 + 10 16 67 Q 3 75 68 = 89.5 + 10 17 93.6 0 19 mode = 79.5 + 10 (0 19) + (0 17) = 8 4. sample s.d., n( x f ) ( x f s = n( n 1) ) = = 19. 100(671705) (7970) 100(100 1) 1.8.6 Coeffcent of Varaton The coeffcent of varaton s a measure of relatve mportance. It does not depend on unt and can be used to make comparson even two samples dffer n means or relate to dfferent types of measurements. The coeffcent of varaton gves: Standard Devaton Mean 100% Example 11 x S Salesman salary $916.76/month $86.70 Clercal salary $98.50/week $0.55 4

86.70 CVs = 100% = 31% 916.76 0.55 CVc = 100% = 1% 98.50 1.8.7 Skewness The skewness s an abstract quantty whch shows how data pled-up. A number of measures have been suggested to determne the skewness of a gven dstrbuton. One of the smplest one s known as Pearson s measure of skewness: Skewness = Mean Mode Standard Devaton 3 (Mean Medan) Standard Devaton If the longer tal s on the rght, we say that t s skewed to the rght, and the coeffcent of skewness s postve. Skewed to the rght (postvely skewed) 5

If the longer tal s on the left, we say that s skewed to the left and the coeffcent of skewness s negatve. Skewed to the left (negatvely skewed) Example 1 We are gong to use Example 9 to evaluate the dfferent measurements of varaton. As stated above, the salary ($) scales of the two companes are: Company A: 5,000 15,000 5,000 35,000 45,000 55,000 Company B: 5,000 5,000 5,000 55,000 55,000 55,000 Range Company A: $55,000 - $5,000 = $50,000 Company B: $55,000 - $5,000 = $50,000 6

Mean absolute devaton Company A: $ ( 5,000-30,000 + 15,000-30,000 + 5,000-30,000 + 35,000-30,000 + 45,000-30,000 + 55,000-30,000 ) / 6 = $15,000 Company B: $ ( 5,000-30,000 + 5,000-30,000 + 5,000-30,000 + 55,000-30,000 + 55,000-30,000 + 55,000-30,000 ) / 6 = $5,000 Varance Company A: {(5,000-30,000) + (15,000-30,000) + (5,000-30,000) + (35,000-30,000) + (45,000-30,000) + (55,000-30,000) } / 6 = 91,666,667 (dollar square) Company B: {(5,000-30,000) + (5,000-30,000) + (5,000-30,000) + (55,000 - Standard devaton 30,000) + (55,000-30,000) + (55,000-30,000) } / 6 = 65,000,000 (dollar square) Company A: $ 91,666,667 = $17,078 Company B: $ 65,000,000 = $5,000 Coeffcent of varaton Company A: $17,078 / $30,000 100% = 56.93% Company B: $5,000 / $30,000 100% = 83.33% 7

Coeffcent of Skewness Pearson s 1 st coeffcent of skewness, SK 1 Mean Mode = Standard devaton Pearson s nd coeffcent of skewness SK 3(Mean Medan) = Standard devaton Chebyshev s Theorem For any set of data, the proporton of data that les between the mean plus and mnus k 1 standard devatons s at least 1 k 1.e. Pr( µ kσ x µ + kσ ) 1 k Symbols Populaton Sample Sze N n Mean µ x Standard devaton σ s Varance σ s 8