Merits and Demerits of Harmonic Mean

Merits

• It is rigidly defined average and its value is always definite.
• Its value is based on all observation in a given series.
• It is capable of further algebraic treatment.
• It is not affected by sampling fluctuations.
• In problems relating to time and rates, it gives better results as compared to other averages. Harmonic mean gives the best result when distance covered are the same, but speed of coverage varies.

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Demerits or Limitations

• It is not easily understood and hence its application is ignored.
• It is not easy to calculate as it involves reciprocal values (The use of calculators can help to remove this difficulty).
• It gives undue weights to small items and ignores bigger items. This restricts its use in the analysis of economic data.
• In case of zero or negative values, it cannot be computed.