Question

Questions:

1. What makes a value an "outlier"? How would you determine whether a value is an outlier?

2. You have access to a database that shows you how much money Universal Orlando guests have spent on their vacation. If you want to estimate how much the typical family spends, what measure of center (mean, median, mode) would you use and why?

Answer 1

1) Outlier is a data value present in data set, which is either extremely large or extremely small as compared to other data values in the data set.

Any data value is below mean minus 3 times of standard deviation or above mean plus 3 times standard deviation, is considered as outlier data value.

2) Mode is used for quantitative data set. So, we can either select median or mean based upon the requirement. In case of average family spending, median would be more useful than mean because the mean can be greatly influence by any outlier in the data value whereas median is independent of outlier data value.

So, it is median is more useful as a measure of center to represent the average family spending.