Objectives of Average

There are two main objectives of the study of average:

(i)    To get one single value that describes the characteristics of the entire group.

Measures of central value, by condensing the mass of data is one single value, enable us to get a bird’s – eye view of the entire data. Thus one value can represent thousands, lakhs and even millions of values.

(ii)    To facilitate comparison.

Measures of central value, by reducing the mass of data to one single figure, enable comparison to be made. Comparison can be made either at a point of time or over a period of time.

However, while making comparison on should also take into consideration the multiplicity of forces that might be affecting the data. For example, if per capital income is rising in absolute terms from one period to another, it should not lead one to think that the standard of living is necessarily improving because the prices might be rising faster than the rise in per capita income and so in real terms people might be worse off. Moreover, the same measure should be used for making comparison between two or more groups.

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