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Data & Analytics · Foundational

Weighted Average

An average in which each value is multiplied by a weight reflecting its importance or frequency, divided by the sum of the weights.

Definition

Weighted averages correct for different group sizes, for example the average price across products weighted by units sold. Averaging averages without weights is a common error.

Example

Σ(price × units) / Σ(units)

Exam tip

The average of regional averages is not the overall average unless the regions are the same size; weight by count.

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