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The Insurance Institute for Highway Safety (www.iihs. org, June 11,2009 ) published data on repair costs for cars involved in different types of accidents. In one study, seven different 2009 models of mini- and micro-cars were driven at 6 mph straight into a fixed barrier. The following table gives the cost of repairing damage to the bumper for each of the seven models. \begin{tabular}{|lc|} \hline Model & Repair Cost \\ \hline Smart Fortwo & \(\$ 1,480\) \\ Chevrolet Aveo & \(\$ 1,071\) \\ Mini Cooper & \(\$ 2,291\) \\ Toyota Yaris & \(\$ 1,688\) \\ Honda Fit & \(\$ 1,124\) \\ Hyundai Accent & \(\$ 3,476\) \\ Kia Rio & \(\$ 3,701\) \\ \end{tabular} a. Calculate and interpret the value of the median for this data set. b. Explain why the median is preferable to the mean for describing center in this situation.

Short Answer

Expert verified
The median repair cost for the cars is \$1,688. The median is preferable to the mean in this scenario because it provides a better representation of the central tendency in situations where data is skewed by outliers.

Step by step solution

01

Sorting the data

First, sort all car repair costs in ascending order: \$1,071 (Chevrolet Aveo), \$1,124 (Honda Fit), \$1,480 (Smart Fortwo), \$1,688 (Toyota Yaris), \$2,291 (Mini Cooper), \$3,476 (Hyundai Accent), \$3,701 (Kia Rio)
02

Calculating the median

Find the median by identifying the middle number in the sorted list. The number of elements is seven, so the fourth (the middle) element onwards is the median. Therefore, the median repair cost is \$1,688, associated with the Toyota Yaris.
03

Interpret the median

The median is the middle term in a sorted dataset and acts as the central tendency in a distribution. It means half of the car models have repair costs less than or equal to \$1,688, and half have repair costs greater than or equal to \$1,688.
04

Discussing why the median is preferable to the mean in this data set

The mean can be skewed by outliers, meaning it could provide a misleading representation of the central tendency if there are significantly larger or smaller values. In this case, the Hyundai Accent and Kia Rio have notably higher repair costs that would pull the mean upward. The median, however, is not affected by the magnitude of extreme values hence it provides a better representation of the central tendency.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Median
The median is a measure of central tendency that represents the middle value in a sorted dataset. In the context of car repair costs, sorting the expenses helps identify the median. For example, if you have the costs listed as \\(1,071, \\)1,124, \\(1,480, \\)1,688, \\(2,291, \\)3,476, and \\(3,701, the median is the fourth number, \\)1,688, associated with the Toyota Yaris. This is because it is the value at the center of the list when they are ordered from smallest to largest. The main feature of the median is that it divides the dataset into two equal halves: half of the observations are below the median, and half are above. This makes it a useful measure, especially in cases where data might be skewed or have outliers, as it isn't affected by extremely high or low values.
Central Tendency
Central tendency is a statistical measure that identifies a single value as representative of an entire dataset, aiming to provide an indication of a "central" point. There are several measures of central tendency, including the mean, median, and mode. In data with no outliers, the mean might be the most representative measure. However, when discussing the bumper repair costs from the exercise, the median is preferred because it effectively divides the data into two halves, providing a more accurate representation of a typical data point in the presence of skewed data or outliers. Each type of central tendency is useful under different circumstances:
  • Mean: Best for data without extreme values or outliers.
  • Median: Useful when dealing with skewed data or outliers.
  • Mode: Most useful for categorical data to find the most common category.
By understanding the different measures of central tendency, one can better decide which to use based on the characteristics of the dataset at hand.
Outliers
Outliers are extreme values that significantly differ from the rest of a dataset. These values can disproportionately affect statistical calculations, such as the mean, leading to misleading interpretations. In the repair cost dataset, the Hyundai Accent and Kia Rio have notably higher repair costs (\\(3,476 and \\)3,701 respectively). These numbers could be considered outliers because they are considerably larger than the rest of the costs. Outliers can occur due to variability in the measurement or because of errors. Sometimes they contain valuable information about the dataset or the phenomenon being studied. However, in many cases, they can distort typical analyses by skewing results. This means if you were to calculate the mean for car repair costs, these higher costs would pull the average upwards, potentially misrepresenting the typical cost. Utilizing the median as a measure central tendency is more robust in these situations, as it isn't influenced by the size of the outliers and thus gives a more reliable depiction of the central point of the dataset.

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