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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, the most appropriate measure of variability to use is the Interquartile Range (IQR).

Here are the steps to calculate the IQR:

  1. Arrange the data in ascending order.

  2. Calculate the first quartile (Q1), which is the median of the lower half of the data (not including the median of the entire data set if the data set count is odd).

  3. Calculate the third quartile (Q3), which is the median of the upper half of the data (not including the median of the entire data set if the data set count is odd).

  4. Subtract Q1 from Q3 to find the IQR.

The IQR is a measure of statistical dispersion and is a robust measure of variability, meaning it is not significantly affected by extreme values. It represents the middle 50% of the data set and is less sensitive to outliers than other measures of variability such as the range or standard deviation.

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