Descriptive Statistics

Mode

In statistics, the mode is a measure of "central tendency" (which is, loosly speaking, an indication of the "middle" of the variable). The mode is simply the most common observation in the dataset.

e.g., Among our customers, the mode number of purchases is 68.

Sometimes people will say, "The modal number of purchases is 68."

Unlike a histogram, which is created with vertical bars showing the number of observations that fit into "buckets" or "bins" (e.g., 15 observations between 14.0 and 14.5), the mode is calculated on that exact observation. That is, the mode doesn't use "buckets." Therefore, as a practical matter, if observations are very similar but trivially different (e.g., total lifetime revenue for customers of  $112,315.40,  $112,315.41,  $112,315.43,  and so on), the mode may not be an effective measure of central tendency.