Third Business Moment Decision

The third business moment decision refers to skewness - a measure of how asymmetric a data distribution is around its mean.

Symmetric Distribution

When data is evenly spread on both sides of the mean, the distribution is symmetric and skewness is close to zero - the classic bell-shaped curve is an example.

Positive (Right) Skew

The distribution has a longer tail on the right side, meaning a few unusually high values pull the mean above the median. Income data is a common real-world example.

Negative (Left) Skew

The distribution has a longer tail on the left side, meaning a few unusually low values pull the mean below the median. Exam scores on a very easy test, with most students scoring high and a few scoring very low, often show this pattern.

Calculating Skewness in Pandas

import pandas as pd

scores = pd.Series([85, 92, 78, 90, 20])
print(scores.skew())   # a negative value indicates left skew here

When mean is greater than median, the distribution is typically right-skewed; when mean is less than median, it's typically left-skewed - comparing these two measures gives you a quick, practical way to spot skewness without any formula.

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