At this stage, one may ask as to which of these three measures of central tendency the best is. There is no simple answer to this question. It is because these three measures are based upon different concepts.

The arithmetic mean is the sum of the values divided by the total number of observations in the series.

The median is the value of the middle observation that divides the series into two equal parts. Mode is the value around which the observations tend to concentrate. As such, the use of a particular measure will largely depend on the purpose of the study and the nature of the data;

For example, when we are interested in knowing the consumers preferences for different brands of television sets or different kinds of advertising, the choice should go in favour of mode. The use of mean and median would not be proper.

However, the median can sometimes be used in the case of qualitative data when such data can be arranged in an ascending or descending order.

Let us take another example. Suppose we invite applications for a certain vacancy in our company. A large number of candidates apply for that post. We are now interested to know as to which age or age group has the largest concentration of applicants.

Here, obviously the mode will be the most appropriate choice. The arithmetic mean may not be appropriate as it may be influenced by some extreme values.

However, the mean happens to be the most commonly used measure of central tendency as will be evident from the discussion in the subsequent chapters.