GMAT Statistics: Mean, Median, Mode, and Standard Deviation

Statistics: More Than Just Numbers

The GMAT tests statistics not because business school requires you to be a mathematician, but because it requires you to be a smart interpreter of data. You can expect to see 2-3 statistics-based questions on the Quant section, covering concepts from basic averages to the more complex idea of standard deviation. The key to success is understanding what these measures represent conceptually, not just how to calculate them.

Measures of Center: Mean, Median, and Mode

These three measures describe the 'center' of a data set in different ways.

Mean (or Average)

The mean is simply the sum of all the values divided by the number of values. The key formula to know is Sum = Mean × Number of values. The GMAT often tests your ability to manipulate this formula to find a missing value or the sum of a set.

Median

The median is the middle value in a data set when it is ordered from least to greatest. If there's an even number of values, the median is the average of the two middle values. The most important property of the median is that it is not sensitive to outliers (extremely high or low values).

Mode

The mode is the value that appears most frequently in a data set. A set can have one mode, more than one mode, or no mode at all. This is the least commonly tested of the three measures.

Measures of Spread: Range and Standard Deviation

These measures tell you how spread out or dispersed the data points are.

Range

The range is the simplest measure of spread: Range = Highest Value - Lowest Value.

Standard Deviation (SD)

Standard deviation is a more sophisticated measure of how spread out the data is from the mean. A low SD means the data points are clustered tightly around the mean, while a high SD means they are spread far apart. You will never have to calculate the actual standard deviation on the GMAT. Instead, you need to understand it conceptually:

• If all the numbers in a set are the same, the SD is 0.
• Adding or subtracting the same number to every value in a set does not change the SD.
• Multiplying every value in a set by the same number does change the SD by that same factor.

The GMAT's Favorite Trick: Weighted Averages

Weighted average problems are a GMAT staple. They occur when you need to find the average of two or more subgroups that have different sizes or 'weights'. For example, if you have the average score for men and the average score for women in a class, the overall average will be 'pulled' closer to the average of the larger group. A number line or a 'tug-of-war' approach can be a powerful visual tool for solving these problems.

Common Statistics Traps to Avoid

1. Confusing Mean and Median: The GMAT loves to create scenarios where an outlier pulls the mean in one direction while the median stays the same. Always ask yourself if extreme values are in play.
2. Forgetting to Order the Set for Median: You cannot find the median until you arrange the data set in ascending or descending order. This is a simple but common mistake.
3. Assuming a Simple Average: When you see the word 'average,' especially in a problem with different groups, your first thought should be: 'Is this a weighted average?'