Quandaries and Queries
 


Name: Rebecca

Question: Hi

I have to use a suitable computer package (ie. Excel) to work out the mean and standard deviation of the following:

Price Range            No of Houses        No of Houses
`000                  Area 1              Area 2


45 an under 50         4                   5
50 and under 55        7                   12
55 and under 60        14                  16
60 and under 70        19                  18
70 and under 80        8                   3
80 and under 100       5                   2

I have used excel to work out mean and standard deviation before, but not in a more complicated example like this.

Any advice on where to start would be greatly appreciated.



Hi Rebecca,

The problem, as I see it, is that you don't have all the information. For example, in Area 1 you know that 4 houses sold for a price between 45,000 and 50,000 but you don't know the exact prices. The usual technique here is to estimate these prices and say that the 4 houses sold for a price that is midway between 45,000 and 50,000, that is 47,500.

Create another column which contains midpoints of the "Price Range" column. Use these values to calculate the mean and standard deviation, but weighted by the "No of houses" columns. For example for the "Area 1" column you would have 4 values of 47,500, 7 values of 52,500, and so on.

Penny


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