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Problems with outliers

In this section, we will try to know the consequences of Outliers.

  • In a data distribution, with outliers, the distribution is skewed in the direction of the outliers, which makes it challenging to analyze the data.

  • With the outliers in Regression, residual standard error (RSE) will increase.

  • The inclusion of the outlier causes the R² to decline.

Example:

This is an example of the effect of outliers in statistical computations. With the outliers, the mean was 3.057, but after the removal of outliers, the result reduces to 3.04.