Theory question 104
Tools of Economic AnalysisSection B
What is the median? State its merits and demerits.
Show the model answer
Median: the middle value when the data are arranged in order of size. For n items it is the ((n + 1)/2)th item; with an even number of items it is the average of the two middle values. E.g. 3, 5, 7, 9, 11 → median 7.
Merits: easy to understand and calculate; not affected by extreme values; can be found graphically (ogive); useful for qualitative data that can be ranked; can be found even when end classes are open.
Demerits: data must first be arranged in order, tedious for large data; ignores the actual values of other items; not suitable for further algebraic treatment; may not be an actual value in the data (even number of items); less reliable with small or irregular data.
Define with an example.