6.5.2 Merits and Demerits of Geometric Mean
i) It is rigidly defined
ii) It is based upon all the observations
iii) It is suitable for further mathematical treatment
iv) It is not affected much by fluctuations of sampling
v) It gives comparatively more weight to small items
i) Because of its abstract mathematical character, geometric mean is not easy to understand and to calculate for a non-mathematics student.
ii) If any one of the observations is zero, geometric mean becomes zero and if any one of the observations is negative, geometric mean becomes imaginary regardless of the magnitude of the other items.
Geometric mean is used
i) To find the rate of population growth and the rate of interest
ii) In the construction of index numbers