Trimmed Mean

Accounting Corporate Finance Financial Terms Dictionary

Contents

Truncated mean removes a small specified percentage from the highest and lowest values before calculating the average.

Using a trimmed mean helps eliminate the effect of outliers or data points on the tails that could unfairly affect the traditional mean.
Truncated averages are used in the presentation of economic data to smooth out the results and paint a more realistic picture.
Providing a truncated average inflation rate, along with other indicators, provides a basis for comparison.