[Math] How to calculate weighted average when the weights do not equal 100 percent

averagestatistics

So, I'm in a bit of quandary. I have to calculate a weighted average but the weights do not equal 100%. What potential adjustments can I make to address this issue?

Thanks!

Best Answer

You have items $x_1, \ldots x_n$ with weights $w_1, \ldots, w_n$. The weighted average would be $$ \frac{\sum_{k=1}^n x_i w_i}{\sum_{k=1}^n w_i}. $$

In other words, let $W = \sum_{i=1}^n w_i$ and you can produce new weights $$ u_i = \frac{w_i}{W} $$ with the property that $$ \sum_{i=1}^n u_i = \sum_{i=1}^n \frac{w_i}{W} = \frac{1}{W} \sum_{i=1}^n w_i = 1 $$ and then compute $$ \sum_{i=1}^n u_i x_i = \sum_{i=1}^n \frac{w_i}{W} x_i = \frac{1}{W} \sum_{i=1}^n w_i x_i = \frac{\sum_{i=1}^n w_i x_i}{\sum_{i=1}^n w_i} $$ as noted above.