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Descriptive Statistics Overview & Measures of Central Tendency
Descriptive statistics synthesize raw numerical observations into meaningful summaries that describe the center, spread, and shape of a distribution.
1. Measures of Central Tendency:
- Arithmetic Mean (x̄): x̄ = (1/n) Σ xᵢ. The standard average and center of gravity for balanced distributions.
- Median (Q2): The 50th percentile value dividing sorted observations in half. Robust against extreme outliers.
- Mode: The value(s) with highest occurrence frequency. Can be unimodal, bimodal, multimodal, or non-existent.
- Midrange: (Min + Max) / 2. A quick estimate of the midpoint between extrema.
- Trimmed Mean (10%): Mean computed after discarding top 5% and bottom 5% of extreme values to reduce outlier distortion.
- Geometric Mean: (∏ xᵢ)^(1/n). The multiplicative mean for exponential growth rates, compound interest, and normalized index factors (valid for positive numbers).
- Harmonic Mean: n / Σ(1/xᵢ). The reciprocal mean for rates, ratios, and speed/distance computations.
2. Selecting the Best Central Tendency Metric:
- Symmetrical Data (Normal Distribution): Arithmetic Mean is most statistically efficient.
- Skewed / Heavy-Tailed Data (Income, Web Traffic, House Prices): Median provides a more reliable measure of typical central values.
- Categorical or Grouped Bins: Mode highlights the most popular cluster.
Measures of Dispersion, Variability & Bessel's Correction
Measures of dispersion quantify the degree of spread, scatter, and variability among data points around the central value.
1. Mathematical Formulas for Spread:
- Sample Variance (s²): s² = Σ(xᵢ - x̄)² / (n - 1). Employs Bessel's correction (n - 1 degrees of freedom) to ensure that the sample variance estimator has an expected value exactly equal to the true population variance.
- Population Variance (σ²): σ² = Σ(xᵢ - μ)² / N. Used when the dataset contains the exhaustive universe of observations.
- Standard Deviation (s or σ): The square root of variance, expressed in identical physical units as the original data.
- Standard Error of the Mean (SEM): SEM = s / √n. Measures the precision with which the sample mean estimates the true population mean.
- Interquartile Range (IQR): IQR = Q3 - Q1. The middle 50% spread, completely immune to extreme outliers.
- Range: R = Max - Min. Total spread between extrema.
- Mean Absolute Deviation (MAD): MAD = (1/n) Σ |xᵢ - x̄|. The average absolute distance of points from the mean.
- Coefficient of Variation (CV%): CV = (s / x̄) × 100%. A dimensionless relative measure of dispersion, allowing comparison across datasets with different scales.
Five-Number Summary, Quartiles & Tukey Outlier Detection
The Five-Number Summary provides an exploratory summary of distribution position without making parametric assumptions:
1. Five-Number Summary Construction:
- Minimum: Lowest value observed.
- First Quartile (Q1): 25th percentile (splits bottom 25% from top 75%).
- Median (Q2): 50th percentile (central balance).
- Third Quartile (Q3): 75th percentile (splits bottom 75% from top 25%).
- Maximum: Highest value observed.
2. Tukey IQR Outlier Detection Rules:
- Interquartile Range: IQR = Q3 - Q1
- Lower Inner Fence: Q1 - (1.5 × IQR)
- Upper Inner Fence: Q3 + (1.5 × IQR)
- Lower Outer Fence: Q1 - (3.0 × IQR)
- Upper Outer Fence: Q3 + (3.0 × IQR)
Values between Inner and Outer fences are designated Mild Outliers (plotted as open circles on box plots). Values beyond Outer fences are designated Extreme Outliers (plotted as filled markers), signaling severe anomalies or measurement artifacts.
Distribution Shape, Skewness, Kurtosis & Z-Score Standardization
Beyond center and spread, higher statistical moments quantify the shape, asymmetry, and tail behavior of datasets:
1. Distribution Asymmetry (Skewness):
- Fisher-Pearson Skewness (g₁): g₁ = (n / ((n - 1)(n - 2))) Σ ((xᵢ - x̄) / s)³
- Positive Skew (g₁ > +0.5): Right-skewed distribution with a prolonged right tail and Mean > Median.
- Negative Skew (g₁ < -0.5): Left-skewed distribution with a prolonged left tail and Mean < Median.
- Symmetric (g₁ between -0.5 and +0.5): Balanced bell-shaped profile.
2. Tail Heaviness (Excess Kurtosis):
- Excess Kurtosis (g₂): g₂ = [n(n + 1) / ((n - 1)(n - 2)(n - 3))] Σ ((xᵢ - x̄) / s)⁴ - [3(n - 1)² / ((n - 2)(n - 3))]
- Leptokurtic (g₂ > +0.5): Fat-tailed distribution prone to extreme outlier events.
- Platykurtic (g₂ < -0.5): Thin-tailed, flat distribution with low outlier likelihood.
- Mesokurtic (g₂ ≈ 0): Matches the standard Gaussian normal distribution tail profile.
3. Z-Score Standardization & Empirical Rule:
- Standard Z-Score: z = (x - x̄) / s
- Under a Normal Distribution: 68.27% of observations fall within ±1σ (z ∈ [-1, +1]); 95.45% fall within ±2σ (z ∈ [-2, +2]); and 99.73% fall within ±3σ (z ∈ [-3, +3]).