Geometric vs. Arithmetic Mean: What’s the difference?

Part 4 of the Learn Stats with Bayes series

There are multiple ways to calculate the mean of a dataset:

▹ Arithmetic mean — this is the method that we are most familiar with and taught in schools.

▹ Geometric mean — this is the topic of the following post

▹ Harmonic mean

Definition of Geometric Mean

Geometric mean, also known as geometric average, is a way to calculate average for data that represent exponential or varying growth. It is defined as the product of the individual data points, all raised to the power of 1/n, where n is the sample size.

Application of Geometric Mean

Geometric mean is typically used for data whose values are exponential in nature, or are supposed to be multiplied together.

1. Data which are exponential in nature

You can use geometric means to calculate things like:

• Prevalence of diseases/Covid cases in a country, since some diseases grow exponentially, and having more cases now and will likely lead to having more cases in the future
• Growth of a population

2. Data which are supposed to be multiplied together