23. A nonprofit organization ran a fundraiser and would like to determine the amount of a typical donation. Which statistic is less affected by outliers and skewed data and should be used to determine the amount of a typical donation?
Answer: B
The median is the most appropriate statistic for determining the amount of a typical donation.
The median is less affected by outliers and skewed data, making it a reliable measure of central tendency for this scenario.
A) Mean
The mean is calculated by adding all values and dividing by the number of observations. It can be significantly skewed by outliers, which can distort the perception of a typical donation amount, especially in a fundraising context where large donations may not represent the general trend.
B) Median
The median represents the middle value when data is arranged in ascending order. It effectively mitigates the influence of outliers and skewed distributions, providing a more accurate reflection of a typical donation amount, which is essential for the nonprofit organization’s analysis.
C) Z-score
The Z-score indicates how many standard deviations an element is from the mean. While useful for identifying outliers, it does not provide a measure of central tendency itself and thus is not appropriate for determining a typical donation amount.
D) Mode
The mode represents the most frequently occurring value in a dataset. While it can indicate common donation amounts, it may not accurately reflect a typical donation, especially if the data is not uniformly distributed or if there are multiple modes present.
Conclusion
The median is definitively the right choice for determining a typical donation amount due to its resilience against outliers and skewed data. Other options, such as the mean and mode, either misrepresent typical values or fail to provide a reliable statistic for this context. Thus, using the median offers the most accurate insight into the fundraising outcomes for the nonprofit organization.