Like any other statistical measure, mean deviation also possesses a number of merits and demerits. These are outlined here as under in the light of the characteristics of an ideal measure of dispersion.
- It is simple to understand.
- It is easy to calculate.
- It is based on all the observations of a series.
- It shown the dispersion, or scatter of the various items of a series from its central value.
- It is not very much affected by the values of extreme items of a series.
- It facilitates comparison between different items of a series.
- It truly represents the average of deviations of the items of a series.
- It has practical usefulness in the field of business and commerce.
- It is not rigidly defined in the sense that it is computed from any central value viz. Mean, Median, Mode etc. and thereby it can produce different results.
- It violates the algebraic principle by ignoring the + and – signs while calculating the deviations of the different items from the central value of a series.
- It is not capable of further algebraic treatment.
- It is affected much by the fluctuations in sampling.
- It is difficult to calculate when the actual value of an average comes out in fraction, or recurring figure for that in such a case it requires the use of the shortcut method which involves a cumbersome formula subject to adjustment in different cases.
- It is not suitable for sociological study.