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The Weighted Mean andWorking with Grouped Data

The Weighted Mean Mean for Grouped Data Variance for Grouped Data Standard Deviation for Grouped Data

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The Weighted Mean

When the mean is computed by giving each data value a weight that reflects its importance, it is referred to as a weighted mean.

In the computation of a grade point average (GPA) the weights are the number of credit hours earned for each grade.

When data values vary in importance, the analyst must choose the weight that best reflects the importance of each value.

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The Weighted Mean

xwt = wi xi

wi

where: xi = value of observation i

wi = weight for observation i

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Grouped Data

The weighted mean computation can be used to obtain approximations of the mean, variance, and standard deviation for the grouped data.

To compute the weighted mean, we treat the midpoint of each class as though it were the mean of all items in the class.

We compute a weighted mean of the class midpoints using the class frequencies as weights.

Similarly, in computing the variance and standard deviation, the class frequencies are used as weights.

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Mean for Grouped Data

Sample Data

Population Data

where: fi = frequency of class i

Mi = midpoint of class i

i

ii

f

Mfx

N

Mf ii

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Example: Apartment Rents

Given below is the previous sample of monthly rents

for one-bedroom apartments presented as grouped data

in the form of a frequency distribution.

Rent ($) Frequency420-439 8440-459 17460-479 12480-499 8500-519 7520-539 4540-559 2560-579 4580-599 2600-619 6

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Example: Apartment Rent

Mean for Grouped Data

This approximation differs by $2.41 from

the actual sample mean of $490.80.

Rent ($) fi Mi fiMi420-439 8 429.5 3436.0440-459 17 449.5 7641.5460-479 12 469.5 5634.0480-499 8 489.5 3916.0500-519 7 509.5 3566.5520-539 4 529.5 2118.0540-559 2 549.5 1099.0560-579 4 569.5 2278.0580-599 2 589.5 1179.0600-619 6 609.5 3657.0

Total 70 34525.0

x 34 52570

493 21,

.

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Variance for Grouped Data

Sample Data

Population Data

sf M xn

i i22

1

( )

22

f M

Ni i( )

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Example: Apartment Rents

Variance for Grouped Data

Standard Deviation for Grouped Data

This approximation differs by only $.20 from the actual standard deviation of $54.74.

s2 3 017 89 , .

s 3 017 89 54 94, . .