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R Programming Complete Tutorial

Outlier Treatment

In this section, we will use three different methods to treat outliers.

Discarding Outliers:

This is a straight forward way. If we thing outliers are from measurement error, just remove it from the data set. In this case, we are losing data (outliers) with the entire row (Multivariate Analysis).

Mean / Median Imputation

This is a much better option as we are not losing any data. Mean imputation reduces the variance and shrinks standard errors, which invalidates most hypothesis tests and the calculation of confidence interval. But still Mathematically Not enough.

Winsorising

Winsorizing is the transformation of data by limiting extreme values in the statistical data to reduce the effect of possibly spurious outliers.It will change the outliers to the nearest extreme.