Geometric mean

In mathematics, the geometric mean is a type of mean or average, which indicates the central tendency or typical value of a set of numbers by using the product of their values (as opposed to the arithmetic mean which uses their sum). The geometric mean is defined as the nth root of the product of n numbers, i.e., for a set of numbers , the geometric mean is defined as .

For instance, the geometric mean of two numbers, say 2 and 8, is just the square root of their product; that is . As another example, the geometric mean of the three numbers 4, 1, and 1/32 is the cube root of their product (1/8), which is 1/2; that is .

A geometric mean is often used when comparing different items—finding a single "figure of merit" for these items—when each item has multiple properties that have different numeric ranges. For example, the geometric mean can give a meaningful "average" to compare two companies which are each rated at 0 to 5 for their environmental sustainability, and are rated at 0 to 100 for their financial viability. If an arithmetic mean were used instead of a geometric mean, the financial viability is given more weight because its numeric range is larger—so a small percentage change in the financial rating (e.g. going from 80 to 90) makes a much larger difference in the arithmetic mean than a large percentage change in environmental sustainability (e.g. going from 2 to 5). The use of a geometric mean "normalizes" the ranges being averaged, so that no range dominates the weighting, and a given percentage change in any of the properties has the same effect on the geometric mean. So, a 20% change in environmental sustainability from 4 to 4.8 has the same effect on the geometric mean as a 20% change in financial viability from 60 to 72.