Descriptive Statistics and Distribution
EVIDENCE LAB · 03
Statistics
& Distributions.
Averages alone do not describe an economy. Learn to read the centre, spread, shape and exceptional observations of economic data.
SPREADSHAPEOUTLIER
01 · DESCRIPTIVE STATISTICS
Four lenses.
One distribution.
Mean
x̄ = Σxᵢ / n
Uses every observation but responds strongly to extreme values.
Median
P₅₀
The middle ordered value; robust when income or wealth is skewed.
Standard deviation
σ = √Σ(xᵢ−μ)²/n
Typical distance from the mean, expressed in the variable’s units.
Interquartile range
IQR = Q₃ − Q₁
Spread of the central 50%, resistant to isolated extremes.
02 · DISTRIBUTION SHAPE
Shape changes
the economic story.
Approximately symmetric
Mean and median are similar. Dispersion describes uncertainty around a meaningful centre.
Right-skewed
A small number of large observations pull the mean above the median—common for income, wealth and firm size.
INTERACTIVE DISTRIBUTION LABORATORY
Change the data.
Watch the story move.
Enter comma-separated observations or use a preset. ECONORIA recalculates the distribution and generates an economic interpretation.
The mean and median are close, suggesting a broadly balanced distribution without a dominant extreme observation.
03 · OUTLIERS
An outlier may be an error.
Or the most important observation.
Never delete an extreme value automatically. Verify it, understand its generating process, report its influence and compare robust results. Exceptional firms, regions or crises may be precisely what policy analysis must explain.
