Ceteris LabInteractive Econometrics

Lesson 5

Mean, median, variance, and standard deviation

Big question

How can we describe the center and spread of a variable?

Lesson progress

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Big question
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Learning objectives

  • Explain mean, median, variance, and standard deviation in plain language.
  • Use mean correctly in an interpretation.
  • Connect the lesson idea to a formula, graph, Python result, or real example.

Simple explanation

The mean and median describe a typical value. Variance and standard deviation describe how spread out the values are. Together, they help us understand a dataset before estimating any model.

Key terms

Mean
The arithmetic average.
Median
The middle value after sorting the data.
Variance
The average squared distance from the mean.
Standard deviation
The square root of variance, measured in the original units.

Sample mean

xˉ=1ni=1nxi\bar{x} = \frac{1}{n}\sum_{i=1}^{n}x_i

Example

For wages 18, 22, and 30, the mean is 70 / 3 = 23.33, while the median is 22.

Summary statistics

1import pandas as pd2 3wages = pd.Series([18, 22, 30])4print(wages.mean())5print(wages.median())6print(wages.std())

Checkpoint activity

Pause and explain this lesson's main idea in your own words before moving forward.

Try it yourself

Write one plain-English sentence explaining the main idea from this lesson.

Common mistakes

Check these before you move on.

A regression coefficient describes a pattern unless the assumptions or research design support a causal interpretation.

Quick quiz

Which statistic is the middle value after sorting?

Key takeaway

Always summarize center and spread before trying to explain patterns.