Question

Robert is using the following data samples to make a claim about the house values in his neighborhood: House Value A $250,000 B $275,000 C $300,000 D $267,000 E $250,000 Based on the data, should Robert use the mean or the median to make an inference about the house values in his neighborhood?

Answer 1

Robert should use the mean to make an inference about the houses values in this neighborhood. The mean is $268,400 and the median is $267,000. The mean is larger suggesting that his neighborhoods value is larger than the median.

Answer 2

He should use the mean because there are no outliers that affect the mean

Explanation:

The mean is ($250,000 + $275,000 + $300,000 + $267,000 + $250,000)/5 = $268,400

To calculate the median we have to order the values from least to greatest:

$250,000 - $250,000 - $267,000 - $275,000 - $300,000

and then take the number that is halfway into the set. In this case, the median is $267,000

Median value is preferred when an outlier is present because in that case mean value loss representability of the sample. In this case mean and median are similar, there are no outliers, and mean should be used to make an inference.