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Based on the version of a few economists, mean deviation turns hugely helpful to forecast business cycles and this measure does remove many demerits of various other measures like it doesn’t overlook extreme values or terms that play vital roles in mean. 

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What is Meant by Mean Deviation?

In mathematics and statistics, the deviation is considered the measure that is utilized for finding the difference between a variable’s expected value and the observed value. The mean deviation is utilized for calculating the distance of values from the center of the data set.

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The mean deviation is calculated by discovering the observations’ average first. After this, the difference of every observation from the mean gets determined. In the following step, the average of the deviations is made. This analysis turns helpful in calculating how irregular observations tend to be right from the mean.

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The Formula for Mean Deviation

The mean deviation of a data value can be calculated using the procedure mentioned below:

Mean Deviation is [Σ |X – µ|]/N

Σ does represent the sum of values.

M represents the data set’s mean value.

X represents every value present in the data set.

|| signifies the absolute value and ignores the “-“symbol.

N does represent the sum of data values.

Features of Mean Deviation

Mean deviation takes its smallest value at a time when the deviation is extracted from the median. It is formed on every observation and does not get influenced by sampling fluctuations. Moreover, unlike, SD, mean deviation doesn’t have mathematical properties.

  • Mean deviation gets defined rigidly and there is a particular method to calculate mean deviation.
  • It includes a calculation that a layman finds tough to understand.
  • It also measures absolute deviation as it averts negative signs.

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Merits of Mean Deviation

Mean deviation is an improved measure in comparison to other procedures of dispersion, like Quartile Range, Range, or Percentile Range.

  • People use mean deviation in other fields, like commerce, business, economics, or other fields of these types.
  • When a comparison is required, then mean deviation turns into the finest measure between a couple of or more than two series.
  • Mean deviation has got the least sampling fluctuations in comparison to Percentile Range, Range, and Quartile Deviation.
  • Mean deviation is formed on the measurement in comparison to an estimate.
  • When people calculate mean deviation from median then it gets lesser influenced by extreme terms.
  • Mean deviation is considered one of the chief focal points of a measure that is utilized for Statistical Analysis.
  • As mean deviation is formed on the deviations related to an average, this provides an improved measure to compare.

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