“Arithmetic mean” and “median” are both measures of central tendency of data; other measures of centrality include geometric mean, mode, harmonic mean, etc. “Arithmetic mean” (also known as “average”) is the most common measure of central tendency, which is calculated as the sum of all values divided by the number of values. Calculating the arithmetic mean is easy, but it is highly affected by extreme values.

“Median” is also a frequently used measure of centrality. The median is the midpoint of a distribution where data values are sorted in ascending order; if there is an even number of values, the median is the arithmetic mean of the two values in the middle. As the median is not affected by extreme values, it is more appropriate to calculate the median of variables with extreme values (e.g. salaries).

Example: The respective salaries of 7 employees in a company are MOP3,000, MOP3,800, MOP4,500, MOP6,400, MOP8,200, MOP9,500 and MOP11,500.

The arithmetic mean of the employee salaries is:
MOP(3,000+3,800+4,500+6,400+8,200+9,500+11,500) ÷7=MOP6,700

he median employee salary is: 3,000, 3,800, 4,500, 6,400 , 8,200, 9,500, 11,500 the middle value, i.e. MOP6,400