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Skewness - Measures and Interpretation - GeeksforGeeks

This document defines and explains statistical skewness through different measures. It discusses positive and negative skewness, and describes three common measures of skewness: Karl Pearson's measure, Bowley's measure, and Kelly's measure. Examples are provided to demonstrate calculating and interpreting skewness with these measures.

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0% found this document useful (0 votes)
201 views

Skewness - Measures and Interpretation - GeeksforGeeks

This document defines and explains statistical skewness through different measures. It discusses positive and negative skewness, and describes three common measures of skewness: Karl Pearson's measure, Bowley's measure, and Kelly's measure. Examples are provided to demonstrate calculating and interpreting skewness with these measures.

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Accountancy Business Studies Economics Commercial Law Organisational Behaviour Human Res

Skewness – Measures and Interpretation


Last Updated : 02 Nov, 2023

What is Skewness?
Skewness can be defined as a statistical measure that describes the lack of
symmetry or asymmetry in the probability distribution of a dataset. It
quantifies the degree to which the data deviates from a perfectly symmetrical
distribution, such as a normal (bell-shaped) distribution. Skewness is a
valuable statistical term because it provides insight into the shape and nature
of a dataset’s distribution. For example, understanding whether a dataset is
positively or negatively skewed can be important in various fields, including
finance, economics, and data analysis, as it can impact the interpretation of
data and the choice of statistical techniques.

Table of Content

Tests of Skewness
Positive and Negative Skewness
Measurement of Skewness
I. Karl Pearson’s Measure
II. Bowley’s Measure
III. Kelly’s Measure
Interpretation of Skewness
Difference between Dispersion and Skewness
Tests of Skewness
There are several statistical tests and methods to assess the skewness of a
dataset. These tests can help you determine whether a dataset is positively
skewed, negatively skewed, or approximately symmetric. Here are some
common tests and techniques used to assess skewness:

1. Visual Inspection: The simplest way to assess skewness is by creating a


histogram or a density plot of the given data. If the plot is skewed to the left,
it is negatively skewed, and if the plot is skewed to the right, it is positively
skewed. If the plot is roughly symmetric, it has no skewness.

2. Skewness Coefficient (Pearson’s First Coefficient of Skewness): This is a


numerical measure of skewness, which determines the skewness when mean
and mode are not equal. It is calculated as:

Skewness as per Karl Pearson’s Measure


Skewness = Mean – Mode

Skewness of Karl Pearson’s Measure


If mean is greater than mode, the skewness will consist positive value.
In case of mean is smaller than mode, the skewness will be a negative
value.
In case of equality of mean and mode, the skewness will be zero.

3. Quartiles are not equidistant from each other; i.e.,

Positive and Negative Skewness


Positive skewness and negative skewness are two different ways that a
dataset’s distribution can deviate from perfect symmetry (a normal
distribution). They describe the direction of the skew or asymmetry in the
data.

1. Positive Skewness (Right Skew)


In a positively skewed distribution, the tail on the right side (the larger values)
is longer than the tail on the left side (the smaller values). This means that
the majority of data points are concentrated on the left side of the
distribution, and there are some extreme values on the right side. In the case
of a positively skewed dataset,

Mean > Median > Mode

Examples of positively skewed data include income distribution (where most


people earn a moderate income, but a few earn extremely high incomes),
exam scores (where most students score in a certain range, but a few score
exceptionally high), and stock market returns (where most days have modest
returns, but a few days may have very high returns).

2. Negative Skewness (Left Skew)


In a negatively skewed distribution, the tail on the left side (the smaller
values) is longer than the tail on the right side (the larger values). This implies
that most of the data points are concentrated on the right side of the
distribution, with a few extreme values on the left side. In the case of a
negatively skewed dataset,

Mean < Median < Mode

Examples of negatively skewed data include test scores on an easy test


(where most students score well, but a few score very low), the age at
retirement (where most people retire at a certain age, but a few retire
exceptionally early), and the gestational age at birth (where most babies are
born full-term, but a few are born prematurely).

Measurement of Skewness
I. Karl Pearson’s Measure
Karl Pearson’s Measure of Skewness uses the mean, median, and standard
deviation of the given data set to quantify the asymmetry or lack of symmetry
in the distribution. It is a dimensionless number that provides valuable
insights into the shape of a dataset’s distribution. This measure is valuable in
various fields of statistics and data analysis, helping researchers and
analysts understand the direction and degree of skewness in their datasets,
which can inform subsequent modeling and analytical decisions.

Skewness as per Karl Pearson’s Measure


Skewness = Mean – Mode

Skewness of Karl Pearson’s Measure


If mean is greater than mode, the skewness will consist positive value.
In case mean is smaller than mode, the skewness will be a negative value.
In case of equality of mean and mode, the skewness will be zero.

Coefficient of Skewness as per Karl Pearson’s Measure


1. With respect to Mean and Median:

2. With respect to Mean and Mode:

Here,

Sk is Karl Pearson’s skewness coefficient.

is the arithmetic mean or average of the data.


M is the middle value of the data when it is arranged in ascending
order.
σ is a measure of the standard deviation of the data.

Coefficient of Karl Pearson’s Measure


If Sk = 0, it indicates a perfectly symmetric distribution where the data
is evenly balanced on both sides of the mean.
If Sk > 0, it suggests a positively skewed distribution where the tail on
the right side is longer or fatter, and the majority of data points are
concentrated on the left side of the mean.
If Sk < 0, it indicates a negatively skewed distribution where the tail on
the left side is longer or fatter, and the majority of data points are
concentrated on the right side of the mean.

Example of Karl Pearson’s Measure:

Calculate Pearson’s skewness coefficient for a dataset of exam scores: 85,


88, 92, 94, 96, 98, 100, 100, 100, 100.

Solution:
Step 1: Calculation of Mean

Mean = 95.3

Step 2: Calculation of Median

Since there are 10 data points, the median is the average of the 5th and 6th
values when sorted in ascending order:

Median = 97

Step 3: Calculation of standard deviation.

Thus, σ=√26.81

σ = ~5.

Step 4: Calculation of mode

It is clear from the data set that 100 is the most frequently occurring value in
the data. Hence, mode of given data is 100.

Step 5: Substitute the values in the formulae

A. With respect to Mean and Median

Sk = -1.02

B. With respect to Mean and Mode


Sk = -0.94

Interpretation: The skewness coefficient (Sk) is negative, indicating a slight


negative skewness in the distribution of exam scores. This means that the
tail of the distribution is slightly longer on the left side, and most of the
scores are concentrated on the right side of the mean.

II. Bowley’s Measure


Bowley’s Skewness Coefficient, named after the British economist Arthur
Lyon Bowley, is a statistical measure used to assess the skewness or
asymmetry in a probability distribution. Unlike some other skewness
measures that rely on moments or deviations from the mean, Bowley’s
Skewness Coefficient is based on quartiles. This coefficient provides a
simple and intuitive way to understand the direction and magnitude of
skewness in a dataset. Bowley’s Skewness Coefficient is especially useful
when dealing with data that may not follow a normal distribution or when a
robust measure of skewness is required.

B=

Q1 is the first quartile (25th percentile),


Q2 is the second quartile (50th percentile, or median), and
Q3 is the third quartile (75th percentile).

Coefficient of Bowley’s Measure


If B = 0, the distribution is perfectly symmetric about the mean (no
skewness).
If B < 0, the distribution is negatively skewed (left-skewed), meaning
the tail on the left side of the distribution is longer or heavier.
If B > 0, the distribution is positively skewed (right-skewed), indicating
that the tail on the right side of the distribution is longer or heavier.

Example of Bowley’s Measure:


Calculate Bowley’s Measure of Skewness for the following dataset
representing the ages of a group of people in a sample: 20, 24, 28, 32, 35, 40,
42, 45, 50.

Solution:
Step 1: Calculate the median (Q2)

Q2= 35 (the middle value)

Step 2: Calculate the first quartile (Q1)

To find Q1, consider the values to the left of the median: 20, 24, 28, 32

Q1 = 26

Step 3: Calculate the third quartile (Q3)

To find Q3, consider the values to the right of the median: 40, 42, 45, 50.

Q3 = 43.5

Step 4: Substitute the above values in the formula

B = -0.02

Interpretation: Since B is negative (B < 0), the distribution is negatively


skewed (left-skewed). This means that the tail of the distribution is longer on
the left side, indicating that there may be outliers or high values on the right
side of the data.

III. Kelly’s Measure


Kelly’s measure of skewness is a way to quantify the degree of skewness in a
distribution by comparing the values of certain percentiles (typically the 10th,
50th, and 90th percentiles) or deciles (10th, 20th, …, 90th percentiles) of the
dataset. Specifically, it involves comparing the difference between the
median (50th percentile) and the average of the 10th and 90th percentiles (or
deciles) to assess the skewness of the data.

Skewness as per Kelly’s Measure


Coefficient of Skewness as per Kelly’s Measure

SKL =

Coefficient of Kelly’s Measure


If SKL is positive, it indicates positive skewness, meaning the
distribution has a longer right tail.
If SKL is negative, it indicates negative skewness, meaning the
distribution has a longer left tail.
If SKL is close to zero, it suggests that the distribution is approximately
symmetric.

Example of Kelly’s Measure:

Calculate Kelly’s Coefficient of Skewness for the following data: 5, 7, 8, 9, 10,


12, 15, 16, 18, 20.
Solution:
Step 1: Find the 10th Percentile

To find the 10th percentile, we need to rank the data in ascending order and
find the value below which 10% of the data falls. In this dataset, the 10th
percentile corresponds to the value at position 1 since 10% of 10 data points
is 1. So, the 10th percentile is 5.

P10 = 5

Step 2: Find the 50th Percentile (Median)

Since there are 10 data points, the median is the average of the 5th and 6th
values when sorted in ascending order

P50 = 11

Step 3: Find the 90th Percentile

To find the 90th percentile, you need to identify the value below which 90% of
the data falls. In this dataset, the 90th percentile corresponds to the value at
position 9 since 90% of 10 data points is 9. So, the 90th percentile is 18.
P90 = 18

Step 4: Substitute the values in the formula.

SKL = 0.07

Interpretation: Since the value is positive, Kelly’s Skewness Coefficient


suggests that the distribution has a slight positive skewness, meaning it has
a longer right tail. This indicates that there may be some data points on the
right side of the distribution that are relatively larger compared to the majority
of data points.

Interpretation of Skewness
Interpreting skewness involves understanding the nature of the skewness
(left or right) and its magnitude. Here is how to interpret skewness:

I. Direction of Skewness:
Negative Skewness (Left Skewed): If the skewness is negative, it indicates
that the distribution is skewed to the left. In a left-skewed distribution:

The tail on the left side (the smaller values) is longer and often contains
outliers.
The majority of data points are concentrated on the right side.
The mean is typically less than the median.

Positive Skewness (Right Skewed): A positive skewness indicates that the


distribution is skewed to the right. In a right-skewed distribution:

The tail on the right side (the larger values) is longer and may contain
outliers.
Most data points are concentrated on the left side.
The mean is typically greater than the median.

Zero Skewness (Symmetric): A skewness value close to zero suggests a


symmetric distribution where the data is evenly distributed on both sides of
the mean. This means there is no skewness.

II. Magnitude of Skewness:


The magnitude of skewness provides information about the degree of
skewness.
If the skewness value is close to 0 (between -0.5 and 0.5), the distribution
is approximately symmetric.
If the skewness value is significantly negative (below -1), it suggests
strong left skewness.
If the skewness value is significantly positive (above 1), it suggests strong
right skewness.

Difference between Dispersion and Skewness

Basis Dispersion Skewness

Focuses on the variability


Focuses on the shape of the
Focus
or spread of data points
distribution and the direction of
around the central
the skewness (left or right).
tendency (mean, median).

Common measures of skewness


Common measures of
include Pearson’s first
dispersion include
coefficient of skewness,
Measurement variance, standard
moment skewness, and
deviation, range, and
graphical methods like Q-Q
interquartile range (IQR).
plots.

Dispersion measures are Skewness provides information


not directly related to the about the relationship between
mean, although they can the mean and the median.
Relationship
to Mean
affect the mean’s Positive skewness implies that
interpretation when it is the mean is greater than the
used as a measure of median, and negative skewness
central tendency. implies the opposite.

Positive skewness indicates a


High dispersion indicates right-skewed distribution with a
that data points are longer right tail, while negative

Interpretation
scattered or dispersed skewness indicates a left-
widely from the center, skewed distribution with a
suggesting a wide range of longer left tail. Zero skewness
values. suggests a symmetric
distribution.
Basis Dispersion Skewness

Dispersion measures are


Skewness is useful for
useful for understanding
understanding the shape of a
the variability of data and
Application
distribution and identifying
assessing how tightly or
whether it is skewed to the left
loosely data points are
or right. It helps assess the
clustered around the
asymmetry of the data.
central value.

Examples of skewness include


Examples of dispersion income distributions (often
include the spread of test right-skewed), response times

Examples
scores in a classroom, the for a website (potentially right-
variability of stock prices skewed with outliers), and exam
over time, or the range of score distributions (which can
ages in a population. be either left-skewed or right-
skewed).

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