Let's begin by trying to find the most "typical" value of a data set.
Note that we just used the word "typical" although in many cases you might think of using the word "average." We need to be careful with the word "average" as it means different things to different people in different contexts. One of the most common uses of the word "average" is what mathematicians and statisticians call the arithmetic mean, or just plain old mean for short. "Arithmetic mean" sounds rather fancy, but you have likely calculated a mean many times without realizing it; the mean is what most people think of when they use the word "average".
Imagine the data values on a see-saw or balance scale. The mean is the value that keeps the data in balance, like in the picture below.
If we graph our household data, the $5 million data value is so far out to the right that the mean has to adjust up to keep things in balance
For this reason, when working with data that have outliers – values far outside the primary grouping – it is common to use a different measure of center, the median.
In addition to the mean and the median, there is one other common measurement of the "typical" value of a data set: the mode.
The mode is fairly useless with data like weights or heights where there are a large number of possible values. The mode is most commonly used for categorical data, for which median and mean cannot be computed.
It is possible for a data set to have more than one mode if several categories have the same frequency, or no modes if each every category occurs only once.
Adapted from Math in Society by David Lippman, hosted on LibreTexts (math.libretexts.org) and licensed under CC BY-SA 3.0. Changes were made. License: CC-BY-SA-3.0.
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