Outlier management

Home prices are a good domain to analyze to understand why we need to pay special attention to outliers. Regardless of what region of the world you live in, most houses in your neighborhood are going to fall in a certain range and they are going to have certain characteristics. Maybe something like this:

• 1 to 4 bedrooms
• 1 kitchen
• 500 to 3000 square feet
• 1 to 3 bathrooms

The average home price in the US in 2019 is $226,800. And you can guess that kind of house will probably share some of the characteristics above. But there might also be a couple houses that are outliers. Maybe a house that has 10 or 20 bedrooms. Some of these houses might be a 1 million or 10 million dollars, depending on the number of crazy customizations that these houses might have. As you might imagine, these outliers are going to affect the mean in a data set, and it will affect the average even more. For this reason, and given that there are not too many of these...