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(1) Which measure of center would be best used to advertise the house prices for this area? Also, please add? - lightcake29 - 05-18-2014 01:30 PM
(1) Which measure of center would be best used to advertise the house prices for this area? Also, please add or subtract one or more of the house prices so that one of the other measures is best, and state why that measure is better.
(2) NV Energy now uses wireless electricity meters to record the habits of their local electricity users in a certain area, and the data from those meters will be used to determine energy needs for next year. What type of observational study (cross-sectional, retrospective, prospective) this would be, and why?
- Donald - 05-18-2014 01:41 PM
You've left out part of question 1 in your homework assignment.
Now, in the real world, the answer depends. (I'm a Realtor; I work with home prices every day.) If you have prices like: $100,000, $105,000, $110,000, and $350,000, then the median is far better than the average. (The $350,000 figure would distort your findings.)
If all the prices are clustered around the same point--say $100,000, $105,000, $110,000, and $115,000--then either median or average (mean) is fine. But I'm guessing your assignment had prices similar to the ones I described above, and in that case the median is the best. So if you remove the one outlier, then I'm guessing your teacher wants you to say that the mean is a better calculation. Problem is: Your teacher knows nothing about the real world, but that's the answer he/she wants.
Hope that helps.