Business Mathematics and Statistics · Ch 8 — Measures of Central Tendency
Properties of the Arithmetic Mean
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Properties of the Arithmetic Mean
The arithmetic mean has several algebraic properties that are frequently tested and that also explain why it behaves the way it does.
- The sum of deviations of all observations from their arithmetic mean is always zero: . This is not a coincidence of any particular dataset — it follows directly from the definition of the mean, and it is the exact algebraic reason the assumed-mean method (§2) works at all. Worked Example 1 verifies this property numerically on its own data.
- Adding (or subtracting) a constant to every observation shifts the mean by the same constant. If for every observation, then .
- Multiplying (or dividing) every observation by a constant scales the mean by the same constant. If , then . Properties 2 and 3 together are exactly what justify the step-deviation method — shifting by and scaling by change the mean of the deviations in a fully predictable, reversible way, which is why the final answer can always be recovered by undoing the shift and the scale.
- The arithmetic mean is affected by every single value in the data, including extreme (very large or very small) values — unlike the median or the mode. This is exactly the property that makes the mean the most representative average when data is fairly symmetric, but also its biggest weakness when a few extreme values (outliers) are present (see §11 and the MCQ in Question 14). …