Friday, February 24, 2012

A study of the size of jury awards in civil cases(such as injury, product liability, and medical malpractice) in Chicago showed that the median award was about $8000 but the mean award wa about $69000. Explain how this great difference betwee the two measures of center can occur.|||Mean is a non - resistant measure of center, as it can be influenced a lot by very small or very large numbers. Median, on the other hand, counts only the amount of data, not the actual value of data.

For instance, in this example, say there are 100 cases.

most of them, lets say 70% of them, are under 10K, but there are a few very large cases that pay out like 1-2 Million. Since the mean is dependent on the actual values of the data, it will go up a lot because of the few very large cases.

Median, on the other hand, will not, as it only counts the number of cases, and in this case, the 50% percentile of the data( the median), is below 10K, accounting for the very small median.

Hope this helps!

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