The arithmetic mean is the most frequently used measure of central tendency in statistics. You can only find the arithmetic mean for a quantitative data. To find it, use the formula below:
Symbols used for the mean
It is important to see the difference between the symbols/formula used for a sample data and the symbols/formula used for a population data.
The yearly incomes (in thousands of dollars) of all 10 employees of a small company are
36, 45, 500, 30, 40, 50, 45, 40, 48, and 55.
Find the mean.
Since the data are given for all 10 employees, the mean that we are looking for is the population mean.
We see that when 500 is included in the data set, the mean is twice as big.
If this company is trying to hire people and says in an advertisement that the average income is 88.3 thousand, it may give the wrong information to those who are looking for a job.
People looking for a job may wrongly assume that they will earn 88.3 thousand dollars. However, it is quite possible that it is the owner of the company who is making 500 thousand.
You are free to collect a sample from the set to find the mean.
See the striking difference! This too illustrate the need to be careful too when choosing the sample.
Furthermore, the value of the sample mean can change while the value of the population is always the same.