Time for some statistics and charting fun. Let’s learn all about histograms and Pareto charts in Excel 2016. You will learn
- What, why and when?
- How to set up and customize histograms
- How to use Pareto charts?
- How to create dynamic histograms?
- Creating histograms in old Excel (2013 or earlier versions)
Sounds interesting? Let’s get started then.
What is a histogram and why use it?
Histogram chart shows distribution of data by grouping it in to bins (range of values). Let’s say you run a customer care center. You have the call log from last month and you want to know how long customers talk to your representatives. If you just average all call lengths, you might get some value like 90 seconds. But this will not tell you the story. If you visualize the distribution of calls by duration like below, you will get a better picture. That is what a histogram is.
Histograms are a great way to explore the underlying distribution of values.
So how to create a histogram in Excel?
Prior to Excel 2016, making histograms involved an intermediate calculation step. This is where you take raw data and calculate the frequencies by bins. But in Excel 2016, Microsoft introduced various new charts including Histograms and Pareto charts. Using these you can quickly make a histogram and understand the frequency distribution and outliers.
Skip ahead to last section of this post if you want to know how to make Histograms in Excel 2013, 2010, 2007 or earlier versions.
To create histogram in Excel, you need some data. Let’s say you have data like this and you want to understand call duration distribution.
To create histogram:
- Select the call duration column
- Go to Insert > Statistic Chart > Histogram
- You will get histogram of call duration with default binning (using Scott’s normal reference rule)
Customizing Histograms
The histogram chart offers very few customization options (compared to other charts like column / scatter plot etc.). That said, you can customize the most important thing – how Excel bins data.
To customize the bins, select the category / horizontal axis and press CTRL+1 to launch formatting options. You can also right-click on axis and choose format axis options. From here, you can choose how you want to bin your data.
Options for binning and what they do:
- Automatic: This is the default option. It bins your data by dividing it in to bins of width h, where
h= (3.5 * sample standard deviation) / (n1/3). - Bin width: If you know more about your data, you can set a custom bin width to analyze frequency by that. For our call center data, bin width of 15 or 30 seconds or even 60 seconds might be interesting.
- Number of bins: You can specify number of bins and let Excel decide the width.
- By category: Use this if you want to bin data by a category value. To use this option, you need to set category axis to some labels. For example, you can explore number of calls by representative this way.
- Overflow and Underflow settings: Use this to set limits on values to bunch at both edges of your distribution range.
Example Histograms
Check out below example histograms to understand how each of the binning settings work.
Default Histogram – Calls by duration
Histogram – Calls by duration, bin width = 15 seconds
Histogram – Calls by duration, number of bins = 10
Histogram – Calls by duration, bin width = 15 seconds, outliers grouped.
Histogram – Calls by Representative – bins grouped by category
Create interactive histogram
You can combine histograms with interactive features in Excel like slicers or form controls to create amazing histograms. Check out below demo:
To create an interactive histogram, follow below instructions.
- Make sure your data is formatted as table.
- Add a slicer on the column you want filter. Use Insert > Slicer option.
- Insert histogram as usual
- Now, if you operate the slicer, the histogram gets filtered too and shows distribution only for sliced values.
Related:
- Everything you ever wanted to know about Excel slicers – in this handy guide.
- Using form controls in Excel charts – Example
What is a Pareto Chart then?
A Pareto chart is a special kind of Histogram. In this chart, bins are arranged in descending order of frequency. Cumulative frequency is shown on secondary axis. Using this chart, you can understand which bins / categories contribute most.
Here is an example of Pareto chart:
How to create Pareto charts in Excel?
The process is same as Histogram. Select a column containing values, optionally include column with category information. Go to Insert > Statistic chart > Pareto chart. Here is an example Pareto chart of purchase amounts by representative.
You can use custom bin settings too. Just select the chart’s horizontal axis and customize. Here is an example Pareto chart on number of calls by amount with bin size = $25.
How to make histograms in older versions of Excel
If you do not have Excel 2016, you can still create histograms. You just need an intermediate step to convert raw data to frequencies by bin. You can use either formulas or data analysis tools to achieve this. Another simple way to achieve this is to use Pivot Tables > Grouping option.
Creating histograms with Pivot tables:
- Insert a pivot from your raw data
- Add numbers you want to bin to row label area.
- Add some text value or anything else to values area and summarize by count.
- Right click on row labels and choose group
- Set up bin size to group the numbers.
See this demo to understand the process.
The final result looks like this:
Download Histogram and Pareto Chart Examples
Click here to download workbook with histogram and Pareto chart examples. It has all the charts you saw in this tutorial. Examine the charts and settings to learn more.
Do you create histograms & Pareto charts?
I make histograms all the time. They are excellent visualizations to understand your data. I used to make them with pivot / formulas in earlier versions. Now that they are available as charts in Excel 2016, I use them even more.
What about you? Do you create histograms? How do you make them? How do you like the new histogram and Pareto chart options in Excel 2016? Please share your thoughts in comments.
More tips for analyzing distribution of your data
- Show average and distribution to explain your data better
- Box plots in Excel Dashboards – tutorial
- Pareto Charts in Excel – Tutorial
- Introduction to Statistical analysis using Excel
- 15 quick and powerful ways to analyze business data
14 Responses to “Group Smaller Slices in Pie Charts to Improve Readability”
I think the virtue of pie charts is precisely that they are difficult to decode. In many contexts, you have to release information but you don't want the relationship between values to jump at your reader. That's when pie charts are most useful.
[...] link Leave a Reply [...]
Chandoo,
millions of ants cannot be mistaken.....There should be a reason why everybody continues using Pie charts, despite what gurus like you or Jon and others say.
one reason could be because we are just used to, so that's what we need to change, the "comfort zone"...
i absolutely agree, since I've been "converted", I just find out that bar charts are clearer, and nicer to the view...
Regards,
Martin
[...] says we can Group Smaller Slices in Pie Charts to Improve Readability. Such a pie has too many labels to fit into a tight space, so you need ro move the labels around [...]
Chandoo -
You ask "Can I use an alternative to pie chart?"
I answer in You Say “Pie”, I Say “Bar”.
This visualization was created because it was easy to print before computers. In this day and age, it should not exist.
I think the 100% Bar Chart is just as useless/unreadable as Pies - we should rename them something like Mama's Strudel Charts - how big a slice would you like, Dear?
My money's with Jon on this topic.
The primary function of any pie chart with more than 2 or 3 data points is to obfuscate. But maybe that is the main purpose, as @Jerome suggests...
@Jerome.. Good point. Also sometimes, there is just no relationship at all.
@Martin... Organized religion is finding it tough to get converts even after 2000+ years of struggle. Jon, Stephen, countless others (and me) are a small army, it would take atleast 5000 more years before pie charts vanish... patience and good to have you here 🙂
@Jon .. very well done sir, very well done.
good points every one...
I've got to throw my vote into Jon's camp (which is also Stephen Few's camp) -- bars just tend to work better. One observation about when we say "what people are used to." There are two distinct groups here (depending on the situation, a person can fall in either one): the person who *creates* the chart and the person who *consumes* the chart. Granted, the consumers are "used to" pie charts. But, it's not like a bar chart is something they would struggle to understand or that would require explanation (like sparklines and bullet graphs). Chart consumers are "used to" consuming whatever is put in front of them. Chart creators, on the other hand, may be "used to" creating pie charts, but that isn't an excuse for them to continue to do so -- many people are used to driving without a seatbelt, leaving lights on in their house needlessly, and forwarding not-all-that-funny anecdotes via email. That doesn't mean the practice shouldn't be discouraged!
[...] example that Chandoo used recently is counting uses of words. Clearly, there are other meanings of “bar” (take bar mitzvah or bar none, for [...]
[…] Grouping smaller slices in pie chart […]
Good article. Is it possible to do that with line charts?
Hi,
Is this available in excel 2013?