What does 'Quintiles' mean

A quintile is a statistical value of a data set that represents 20% of a given population, so the first quintile represents the lowest fifth of the data (1-20%); the second quintile represents the second fifth (21% - 40%) and so on.

Quintiles are often used to create cut-off points for a given population: a government sponsored socio-economic study may use quintiles to determine the maximum wealth a family could possess in order to belong to the lowest quintile of society. This cut-off point can then be used as a prerequisite for a family to receive a special government subsidy aimed to help society's less fortunate.

BREAKING DOWN 'Quintiles'

A quintile is a type of quantile, which is defined as equal-sized segments of a population. One of the most common metrics in statistical analysis, the median, is actually just the result of dividing a population into two quantiles. A quintile is one of  four values that divide a range of data into five equal parts, each being 1/5th (20 percent) of the range. A population split into three equal parts is divided into tertiles, while one split into fourths is divided into quartiles. The larger the data set, the easier it is to divide into greater quantiles. Economists often use quintiles to analyze very large data sets, such as the population of the United States.

For example, if we were to look at all of the closing prices for specific stock for every day in the last year, the top 20% of those prices would represent the upper quintile of the data. The bottom 20% of those prices would represent the lower quintile of the data. There would be three quintiles in between the upper and lower quintiles. The average of all the stock prices typically falls between the second and fourth quintiles, which is the middle point of the data.

Common Uses of Quintiles

Politicians invoke quintiles to illustrate the need for policy changes. For example, a politician who champions economic justice can divide the population into quintiles to illustrate how the top 20% of income earners controls what, in his opinion, is an unfairly large share of the wealth. On the other end of the spectrum, a politician calling for an end to progressive taxation might use quintiles to make the argument that the top 20% shoulder too large a share of the tax burden.

In "The Bell Curve," a controversial 1994 book on intelligence quotient (IQ), the authors use quintiles throughout the text to illustrate their research showing that IQ is heavily correlated with positive outcomes in life.

Alternatives to Quintiles

For certain populations, the use of other methods to examine how the data is distributed make more sense than quintiles. For smaller data sets, the use of quartiles or tertiles helps prevent the data from being spread too thin. Comparing the mean, or average, of a data set to its median, or the cutoff point when the data is divided into two quantiles, reveals if the data is evenly distributed or if it is skewed toward the top or bottom. A mean that is significantly higher than the median indicates the data is top-heavy, while a lower mean suggests the opposite.

RELATED TERMS
  1. Population

    Population is the entire pool from which a statistical sample ...
  2. Quartile

    A quartile is a statistical term describing a division of observations ...
  3. Affluenza

    Affluenza is a condition arising from the desire to be wealthy; ...
  4. Consumer Price Index For All Urban ...

    The Consumer Price Index For All Urban Consumers measures the ...
  5. Working-age Population

    The working-age population in a region is the range of ages considered ...
  6. Big Data

    Big data refers to the growth in the volume of structured and ...
Related Articles
  1. Insights

    Is There Still Social Mobility In America?

    There’s a welfare program for everyone and they all have the goal of closing the inequality gap. That being said, is there still social mobility in America today?
  2. Retirement

    Is the Longevity Gap Helping the Rich Get Richer?

    Researchers have found that longevity is why well-off American men collect more in government retirement benefits than their low-income peers.
  3. Personal Finance

    Are We Losing The Middle Class?

    Find out where your income and lifestyle put you compared to the national average.
  4. Taxes

    'Largest Tax Cut in Our Country's History' Hikes Most People's Taxes

    About that "nobody in the middle class is going to get a tax increase" …
  5. Investing

    The Costs of Investing

    text
  6. Insights

    These Companies Are Poised for Growth as Global Population Growth Comes Online

    While there are many concerns about population growth putting pressure on natural resources such as water and energy, these increased demands can spell profits for certain companies that can ...
  7. Investing

    LabCorp In Talks to Buy Contract Researcher PPD

    LabCorp may acquire privately-held Pharmaceutical Product Development LLC.
  8. Small Business

    Top 10 Most Developed Cities in the U.S

    Want to know where to live, work, or play? If so, the following information might be of great value to you.
  9. Insights

    How Demographics Drive The Economy

    Demographics can have a profound effect on the economy. An aging population coupled with a declining birthrate points to a decline in economic growth.
  10. Tech

    Data Analyst: Job Description & Average Salary

    Learn about a data analyst career and how much money you can expect to make. Understand the skills and education needed to become a data analyst.
RELATED FAQS
  1. What area of the consumer price index (CPI) should I use if there is no CPI for the ...

    Learn what data is published by the Bureau of Labor Statistics and how to use the various Consumer Price Index data sets ... Read Answer >>
  2. When should I use seasonally adjusted data from the consumer price index (CPI)?

    Learn what seasonally adjusted data is, how it is determined and when it should be used to evaluate the information gathered ... Read Answer >>
  3. What are the main income statement ratios?

    Learn how to calculate and interpret some of the most common and insightful financial ratios, like earnings per share, from ... Read Answer >>
  4. What is the most important type of data used in business analytics?

    Consider what makes data useful in business analytics, and why companies should search for the types of data that provide ... Read Answer >>
Hot Definitions
  1. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  2. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  3. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  4. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  5. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  6. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
Trading Center