Detecting Outliers

The outliers – or extreme values – can represent a danger for the analysis, because they
directly affect mean and standard deviation. That’s why we should detect, and in some
cases remove the outliers before running such tests.
…

There are two methods for identifying the outliers:

1. A numerical method, based on the standardized values
2. A graphical method, bases on the boxplot chart
How to manage the outliers?…
There are three kinds of outliers, depending on their source:

• Data entry errors, due to lack of attention, negligence, tiredness etc.

• Measurement or data collecting errors, due either to human mistakes or to equipment malfunction.

• Real non-typical, unusual values in your population. These are the so called genuine outliers.
How to manage the outliers?…
There are two basic solutions for dealing with genuine outliers:

• Remove the outliers from the data series

• Keep the extreme values in the data series
How to manage the outliers?…
If we decide to keep the outliers, we have other four possible routes to choose from:

1. Run a nonparametric test, because these tests are less sensitive to outliers.

2. Replace the outliers with values closer to the normal. Let’s suppose that our
data
2.7series look
2.2like this:5.9 3.4 3.0 3.7 2.8
How to manage the outliers?…
Solutions for managing the outliers (continued)

3.Run the parametric test regardless, being aware of the possible effects of the outliers.

4.Perform a so called sensitivity analysis: run both the parametric and the
nonparametric test. If the results are similar, we can conclude that the outliers do not
affect our findings.