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Decile

A decile is a that divides a sorted into ten equal parts, each containing 10% of the observations, with the nine decile points corresponding to the 10th, 20th, 30th, 40th, 50th, 60th, 70th, 80th, and 90th percentiles. This measure extends the concept of quartiles (which divide data into four parts) and quintiles (five parts) by providing finer granularity for analyzing distributions, particularly in large datasets where understanding segmented ranges is essential. Deciles are calculated by first ordering the from lowest to highest and then identifying positions using the for the k-th decile: L_{D_k} = \frac{k(n+1)}{10}, where n is the number of points and k ranges from 1 to 9; if the position falls between integers, is typically applied. For grouped or continuous , an adjusted incorporates cumulative frequencies and class to estimate the decile value within the relevant . In practice, deciles are widely applied in , , and social sciences to summarize , , and distributions, revealing patterns of and variability across segments. For instance, the U.S. routinely publishes deciles alongside quartiles to describe usual weekly for full-time workers, aiding policymakers in assessing labor market trends. Similarly, deciles help in educational and health research to categorize outcomes by socioeconomic groups, such as identifying mortality differentials across deciles.

Definition and Fundamentals

Definition of Decile

A decile is any of the nine values that divide a sorted into ten equal-frequency , with each containing 10% of the points. These values mark the boundaries where the cumulative reaches 10%, 20%, up to 90% of the total observations. The term "decile" derives from the Latin word decem, meaning "ten," reflecting its role in partitioning into tenths. In statistical contexts, the concept was first introduced in 1882 by , who used it to describe divisions in anthropometric distributions. Deciles are typically denoted as D_k for the k-th decile, where k = 1 to $9, representing the lower deciles that separate the subsets. Deciles represent specific instances within the broader framework of s, which generalize such divisions to any percentage.

Relation to Percentiles and Quartiles

Deciles represent specific instances of s, dividing a or into ten equal parts, each comprising 10% of the data. The k-th decile corresponds precisely to the (10k)-th , such that the first decile () is the 10th , the second decile (D2) is the 20th , and so on, up to the ninth decile (D9) as the 90th . In comparison to , which partition data into four equal segments of 25% each—denoted as the first (Q1 at the 25th ), second (Q2 at the 50th ), third (Q3 at the 75th ), and with the serving as Q2—deciles offer a more subdivided view by creating ten segments of 10% each. Notably, the aligns as both the second (Q2) and the fifth decile (D5), providing a common reference point across these measures. Visually, deciles appear as points along the (CDF) of a , marking the values where the CDF reaches 0.1, 0.2, ..., 0.9, thereby illustrating the progressive accumulation of probability mass in the distribution. This positioning on the CDF highlights how deciles capture the quantiles at these intervals, offering a stepwise depiction of the distribution's shape. Deciles provide advantages over quartiles by delivering finer , which is particularly beneficial for analyzing skewed distributions where additional division points better reveal asymmetries and tail behaviors that coarser quartiles might obscure.

Calculation and Computation

Empirical Method for Sample

To compute deciles from a finite sample , begin by the in ascending order to obtain the ordered sample x_1 \leq x_2 \leq \cdots \leq x_n, where n is the sample size. The k-th decile D_k (for k = 1, 2, \dots, 9) divides the data such that approximately 10k% of the observations lie at or below it. The position of the k-th decile in the ordered sample is given by the formula
i_k = \frac{k}{10} (n + 1).
If i_k is an i, then D_k = x_i. This formula applies regardless of whether n is even or odd, as the addition of 1 ensures consistent positioning across sample sizes.
If i_k is not an integer, express it as i_k = i + f, where i = \lfloor i_k \rfloor is the integer part and $0 < f < 1 is the . yields
D_k = x_i + f (x_{i+1} - x_i).
This approach provides a estimate between adjacent ordered values.
In the presence of ties (repeated values in the dataset), sort the data as usual, placing tied observations consecutively in the ordered list; the position formula and proceed unchanged, using the tied values directly, which naturally averages across equal observations when the f spans them. For exact positions falling on tied values, the decile takes that shared value; if requires averaging adjacent tied values (e.g., f = 0.5 between identical x_i and x_{i+1}), the result remains the tied value itself. Consider a small example dataset of 10 test scores: 55, 62, 67, 71, 74, 78, 82, 85, 89, 95 (n = 10). The ordered data are x = [55, 62, 67, 71, 74, 78, 82, 85, 89, 95]. Positions are i_k = (k/10) \times 11.
  • For D_1: i_1 = 1.1, so D_1 = 55 + 0.1(62 - 55) = 55 + 0.7 = 55.7.
  • For D_2: i_2 = 2.2, so D_2 = 62 + 0.2(67 - 62) = 62 + 1 = 63.
  • For D_3: i_3 = 3.3, so D_3 = 67 + 0.3(71 - 67) = 67 + 1.2 = 68.2.
  • For D_4: i_4 = 4.4, so D_4 = 71 + 0.4(74 - 71) = 71 + 1.2 = 72.2.
  • For D_5: i_5 = 5.5, so D_5 = 74 + 0.5(78 - 74) = 74 + 2 = 76.
  • For D_6: i_6 = 6.6, so D_6 = 78 + 0.6(82 - 78) = 78 + 2.4 = 80.4.
  • For D_7: i_7 = 7.7, so D_7 = 82 + 0.7(85 - 82) = 82 + 2.1 = 84.1.
  • For D_8: i_8 = 8.8, so D_8 = 85 + 0.8(89 - 85) = 85 + 3.2 = 88.2.
  • For D_9: i_9 = 9.9, so D_9 = 89 + 0.9(95 - 89) = 89 + 5.4 = 94.4.
This computation divides the sample into 10 equal parts, each containing 10% of the data.

Theoretical Deciles in Distributions

In , the k-th decile D_k of a X with (CDF) F is defined as the value satisfying P(X \leq D_k) = k/10, for k = 1, 2, \dots, 9. This places D_k at the (k/10)- of the , dividing the probability mass into ten equal parts below and above it. The theoretical decile is computed using the , the of the CDF, given by D_k = F^{-1}(k/10). For continuous distributions where F is strictly increasing, this exists uniquely; for general cases, it is defined as the \inf\{x : F(x) \geq k/10\}. This probabilistic approach contrasts with empirical methods by relying on the rather than observed data. For the normal distribution with mean \mu and standard deviation \sigma, the deciles are derived from the standard normal using z-scores. Specifically, the first decile D_1 corresponds to a z-score of approximately -1.28, so D_1 \approx \mu - 1.28\sigma. Higher deciles follow similarly, with z-scores increasing toward positive values (e.g., D_9 \approx \mu + 1.28\sigma). In the uniform distribution on the interval [a, b], the CDF is F(x) = (x - a)/(b - a) for a \leq x \leq b, yielding the quantile function D_k = a + (k/10)(b - a)./03%3A_Distributions/3.06%3A_Distribution_and_Quantile_Functions) This linear form evenly spaces the deciles across the interval, reflecting the constant density. As sample sizes grow large, empirical deciles—computed from sorted sample data—converge uniformly almost surely to their theoretical counterparts, as established by the Glivenko-Cantelli theorem, which guarantees that the empirical CDF converges to the true CDF. This asymptotic property ensures that sample-based approximations reliably approach the population deciles for sufficiently large datasets.

Applications and Uses

In Descriptive Statistics

In descriptive statistics, deciles serve as key tools for summarizing distributions during by dividing ordered into ten equal parts, each encompassing 10% of the observations, thereby providing a more granular view of spread and variability than quartiles alone. This finer partitioning allows analysts to identify patterns in data concentration and that might be obscured by coarser summaries. Deciles relate to as subsets, where each decile corresponds to a 10% interval (e.g., the first decile aligns with the 10th ), enabling broader quantile-based overviews of the dataset. Deciles enhance visualizations such as and histograms by extending the (IQR) to reveal more detailed aspects of the distribution's spread. In extended variants or quantile-based diagrams, decile markers can delineate multiple intervals beyond the IQR, facilitating the detection of outliers that lie above the ninth decile (D9) or below the first (), where values exceed typical variation thresholds. Similarly, in histograms modified using deciles—known as decile histograms—bins are constructed with equal frequencies (each containing exactly 10% of the data), which highlights , , and tail behaviors more effectively than equal-width bins, as demonstrated in analyses of marathon finishing times showing right-skewed distributions. For assessing , decile ranges offer a robust, non-parametric approach by comparing the widths of intervals in the lower and upper tails; for instance, a wider span between the and D9 versus D1 and the indicates positive , reflecting a longer right tail without relying on moments like Pearson's coefficient. This method is particularly useful in exploratory settings with potential outliers, as it leverages central deciles for evaluation. Decile-based tables approximate categorical representations of continuous by grouping observations into ten equiprobable classes defined by decile boundaries, which simplifies of large datasets and reveals proportional distributions across ordered categories. Interpretation of deciles emphasizes their role in conveying relative positioning; for example, if 80% of values fall below the eighth decile (D8), it signals a concentration in lower values, suggesting potential effects or in the that warrants further . Such insights guide decisions in data exploration, like identifying subgroups for deeper scrutiny.

In Finance and Sciences

In , decile ratios such as the D9/D1 ratio—comparing the average income of the ninth decile (80th to 90th ) to the first decile (0th to 10th )—serve as key metrics for assessing , offering a simpler alternative to the by highlighting disparities between upper-middle and lower income groups. The has incorporated decile-based measures, including shares of income held by each decile and ratios like the 90/10 equivalent, into its poverty and analyses since the , using them in global reports to track shared prosperity and distributional changes across countries. For instance, these ratios help quantify how growth benefits the poor versus the affluent, with applications in evaluating pro-poor policies in emerging economies. In , deciles are employed to rank asset returns and construct models for . The Fama-French three- model, introduced in 1993, sorts stocks into decile portfolios based on (size) and book-to-market ratios, revealing that small-cap and value stocks (often in lower or higher deciles, respectively) exhibit higher average returns, which informs investment strategies and risk premia estimation. This decile-based sorting extends to portfolios formed on operating profitability and investment in updated models, enabling analysts to benchmark asset against market benchmarks. Additionally, in , the first decile (D1) of historical return distributions approximates (VaR) at the 90% level under the historical method, where past losses are ranked to estimate potential downside without assuming , providing a non-parametric bound for portfolio . In the social sciences, particularly , deciles facilitate analysis of attainment and performance disparities. The OECD's (PISA) reports group student outcomes by socio-economic deciles using the PISA index of economic, social, and cultural status (ESCS), revealing how performance in , reading, and varies across bands to inform equity-focused reforms. For example, PISA 2022 data showed that in many countries, students in the top socio-economic decile outperformed those in the bottom by over 90 score points in , guiding policies on access and resource allocation. This decile framework also extends to cross-country comparisons, where nations are analyzed in performance bands to identify systemic strengths and gaps. A notable case study is the trend in U.S. household income deciles from Census Bureau data, which illustrates widening post-2008 . Between 2007 and 2016, the income of the top decile (90th-100th ) grew faster than the bottom decile, with the 90/10 rising from approximately 9.5 to 10.2, reflecting slower for lower- households amid stagnation and job losses. This D9-D1 expansion, driven by factors like financial sector gains benefiting higher deciles, underscores broader economic polarization, as upper-decile households captured a larger share of post- growth. By 2018, the disparity had further intensified, with the top decile's exceeding $200,000 compared to under $20,000 for the bottom. However, more recent data from the U.S. Census Bureau indicate a reversal, with decreasing in 2022—the first decline since 2007—as the Gini index fell from 0.410 in 2021 to 0.397 in 2022, amid broader gains across the distribution.

Special Concepts and Variants

Decile Mean

The decile mean refers to the computed separately for the observations within each decile group of a sorted , where the are divided into ten equal-sized segments representing 10% of the total observations each. This technique segments the to highlight central tendencies at different points along the range, offering a granular view of how averages vary across the spectrum. Unlike the overall , which aggregates all values and can be disproportionately skewed by outliers in the tails, decile means confine the influence of extremes to their specific groups, thereby providing a more balanced representation within bounded intervals. The formula for the of the j-th decile group, where j = 1, 2, \dots, 10, is given by \bar{x}_j = \frac{\sum_{i \in D_j} x_i}{|D_j|}, where D_j is the set of observations in the j-th decile, x_i are the values, and |D_j| = n/10 for a of size n (assuming n is divisible by 10 for simplicity; may be used otherwise). An aggregated overall decile can then be formed as the weighted \bar{x} = \sum_{j=1}^{10} \left( \frac{1}{10} \right) \bar{x}_j, which equates to the dataset's global arithmetic mean but underscores the contribution of each segment. This computation is particularly useful in analyses requiring decomposition of the distribution, as it facilitates the examination of subgroup-specific summaries without the distortion from the full range. In practice, decile means have been employed in distributional analyses, such as income studies, to reveal intra-group patterns that the overall mean obscures. For instance, analyses of U.S. family income distributions show that means for lower deciles are substantially lower than those for upper deciles, illustrating skewness and the impact of high-end values on overall averages. This approach enhances robustness in descriptive contexts by focusing on localized averages, making it valuable for identifying equitable or trends without overemphasizing extremes.

Decile Ranks and Bands

Decile ranking assigns ordinal scores to data points by sorting the dataset in ascending order and dividing it into ten equal-frequency groups, where the lowest 10% receive rank 1 (bottom decile) and the highest 10% receive rank 10 (top decile). This approach provides a standardized way to categorize observations based on their relative position within the distribution, facilitating comparisons across datasets. The specific rank score for an observation can be calculated using the formula \text{decile rank} = \left( \frac{\text{rank} - 1}{n - 1} \right) \times 10, where rank is the ordered position (from 1 to n) and n is the total sample size; this yields a continuous value ranging from 0 to 10, typically rounded or adjusted to the nearest integer from 1 to 10 for categorization. Decile bands extend this by aggregating individual deciles into broader intervals, which simplifies and highlights patterns in large sets. For instance, may be grouped into low bands (D1–D3, representing the bottom 30%), middle bands (D4–D7, the central 40%), and high bands (D8–D10, the top 30%), allowing for clearer representation in charts or reports without overwhelming detail. Such banding is particularly useful in , where it reduces complexity while preserving the ordinal structure of the deciles. In applications like scoring models, decile bands have been employed in credit scoring systems to delineate risk tiers since the 1980s, when computational advances enabled widespread adoption of automated risk assessment. Lenders segment applicants into these bands based on predicted default probabilities, with lower deciles indicating higher risk and guiding decisions on interest rates or approval thresholds; for example, the bottom decile might represent the highest-risk tier requiring additional scrutiny. This practice emerged prominently with the development of models like FICO in 1989, enhancing efficiency in retail credit evaluation. A key limitation of decile ranks and bands is the loss of granularity within each group, as all values in a band are treated uniformly despite potential internal variations. For example, consider a dataset of 100 student test scores sorted from 0 to 100; the bottom decile (ranks 1–10, scores 0–25) might include values ranging from 0 to 25, but assigning all to rank 1 or the low band obscures differences, such as distinguishing a score of 5 from 24, which could affect nuanced interpretations of performance. This aggregation can lead to oversimplification in ordinal analysis, particularly in smaller samples where band widths amplify the issue.

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