Outliers

Outliers refers to atypical and infrequent observations that differ markedly from the bulk of observations (in location, scale, or distributional pattern). An observed outlier may be caused by the error in measurement or processing, influenced by an interruptive event (such as strike, natural disaster, political or economic crises), or generated by a different mechanism. Although an outlier may not necessarily be “wrong,” the effect of outliers on inference procedures can be substantial: A small number of outliers may have a disproportionate influence on the estimated value of the correlation coefficients or the slope of the regression line (see Figure 1); the real efficiency of optimal statistical methods could be reduced; and the resultant inference from the statistical data analysis could be unreliable or even invalid.

Outlier ...