Question

If I were given a bunch of salaries for example (200k, 275k, 100k, 125k, 500k, 25 million, 400k, 100k, 520k, 350k, 125k, 1 million, 3 million, 900k, 490k, 560k, 300k, 1 million, 800k, 850k) and I was asked to find the center of data I would find the mean. But since there are such large outliers it wouldn't be a good indicator for what the average salaries are. What would be the best indicator for the center of data besides finding the mean. If you could explain that would be much appreciated I'm here to learn:)

Answer 1

Presence of an outlier will drag the mean of the sample/population towards it and in that case it is not the best measure for describing the sample /population.

Median overcomes this problem by taking the positional middle value when data is in sorted order. The median is generally a better measure of the center when there are extreme values or outliers because it is not affected by the precise numerical values of the outliers.

However if no outlier exist then Mean should be preferred measure of central tendency as mean represents the data set in better way as it includes every value where else median lacks the representatives of data as it only selects the positional middle value.