Geometric or Arithmetic Mean?
February 26th, 2014 at 2:12:17 PM
permalink
So I'm writing a report about how utilized a particular department is a week within a specific time period.
So my Data looks like this:
Week1: 40%
Week2: 31%
Week3: 42%
Week4: 44%
Week5: 41%
Week6: 31%
Week7: 27%
AVG: 37%
Geo: 36%
Does it make more sense to use the average of those 7 weeks or the geometric mean? I recall a long time ago when I was in school that you use the geometric mean when dealing with percentages but I don't really know when you should actually use it over the arithmetic mean. Can you guys help?
So my Data looks like this:
Week1: 40%
Week2: 31%
Week3: 42%
Week4: 44%
Week5: 41%
Week6: 31%
Week7: 27%
AVG: 37%
Geo: 36%
Does it make more sense to use the average of those 7 weeks or the geometric mean? I recall a long time ago when I was in school that you use the geometric mean when dealing with percentages but I don't really know when you should actually use it over the arithmetic mean. Can you guys help?
February 26th, 2014 at 2:16:21 PM
permalink
In this case use arithmetic. Geo has limited uses (the almighty wikpedia has a good entry) and this is not a good candidate.
February 26th, 2014 at 2:25:48 PM
permalink
Thank you Mike
February 27th, 2014 at 3:19:04 AM
permalink
Pretty low utilization. Can you say "lay off"?
February 27th, 2014 at 4:37:13 AM
permalink
There is an order of means
RMS is order 2 (Root Mean Square) and is used in statistics all the time
AM Arithmetic Mean is order 1 (Ordinary average)
GM Geometric Mean is order 0
If all of your initial values are positive then GM<AM<RMS
RMS is order 2 (Root Mean Square) and is used in statistics all the time
AM Arithmetic Mean is order 1 (Ordinary average)
GM Geometric Mean is order 0
If all of your initial values are positive then GM<AM<RMS
