A weighted geometric mean combines positive multiplicative factors when some observations represent more exposure or importance than others. It is the multiplicative counterpart of a weighted average.
The relationship
The defining relationship
Gw = exp[Σ(wi ln xi) ÷ Σwi]
The positive xi are factors and wi are non-negative weights. Only their relative size matters: multiplying every weight by the same constant changes nothing.
See the idea
More weight gives a factor more influence
1.10
1.20
exp[(ln 1.10 + 3 ln 1.20) ÷ 4] ≈ 1.174
Worked example
Weight two growth factors
Factors 1.10 and 1.20 with weights 1 and 3 give Gw = exp[(ln 1.10 + 3 ln 1.20) ÷ 4] ≈ 1.174.
Interpret with care
Choose the relationship that fits
Use it for factors or ratios that compound. Do not use it for ordinary additive amounts such as money totals or test points.