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Which measure of variability is appropriate when a sample is likely to contain one or several extreme values?

Question

Which measure of variability is appropriate when a sample is likely to contain one or several extreme values?

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Solution

When a sample is likely to contain one or several extreme values (also known as outliers), the appropriate measure of variability is the Interquartile Range (IQR).

Here's why:

  1. Interquartile Range (IQR): The IQR measures the statistical spread between the 25th percentile (Q1) and the 75th percentile (Q3) of the data. It is less affected by outliers or extreme values as these fall outside the interquartile range. Therefore, it provides a better measure of variability when the data contains outliers.

  2. Other measures of variability like the range, variance, and standard deviation are more sensitive to outliers. For example, the range, which is the difference between the maximum and minimum values, can be greatly affected by a single extreme value. Similarly, variance and standard deviation, which are based on the mean, can

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