Week 1 Stats 2 - Since the standard deviation represents how tightly the values are clustered around the mean any outliers will not only affect the

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The topic of outliers affecting mean and median was previously touched on, but I think it is important to understand that the outliers have the biggest affect on the mean since the mean is a calculated average of the values. Therefore the median can be a better indicator to be used when looking for the “typical” house. Otherwise the mean will be affected by outliers such as homes with pools, fireplaces, vaulted ceilings, granite counter tops, and any other upgrades that would spike the price of the home. These factors will in affect increase the mean results.
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Unformatted text preview: Since the standard deviation represents how tightly the values are clustered around the mean, any outliers will not only affect the mean but how many values lie further away from the mean. On a side note, thank you for this link. It really broke the material down in terms that were easy to understand. This is the first time I have heard the standard deviation referred to as the “mean of the mean.” Sources: http://www.robertniles.com/stats/stdev.shtml...
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This note was uploaded on 03/26/2012 for the course STATISTIC GM533 taught by Professor Henry during the Fall '10 term at Keller Graduate School of Management.

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