I am looking at a legacy process for work. We look at corporate budget data. The data is composed of annual budgets for different major categories for different corporate regions. The upper management wants to see medians, and I noticed whoever started this report decided to trim whatever amount below 5k and then time the median of all over budgets. (I think his thought process was that rarely people would have a budget less than 5k , so the data collection/reporting must have been incomplete or incorrect). I have never seen people asymmetrically trim the dataset for medians since I think calculation of median depend heavily on symmetry. I did a quick comparison of trends based on medians without his trimming process and with his trimming process, and there are (i think) significant difference.....what do you guys think? Is this type of trimming for median calculation "appropriate"?

Thank you!

  • $\begingroup$ Could you explain what it means to "time the median over all budgets"? $\endgroup$ – whuber Oct 26 '15 at 20:12

If it's budget-related, trimming values below a certain threshold sounds like a financial "indifference" heuristic, kind of like rounding every number up to $100, $1,000, $10,000 or $100,000, etc., depending on the company and their accounting practices. The "appropriateness" is totally a function of convenience in eliminating nuisance numbers, company conventions and culture-specific rules of thumb. In other words, there is no statistical, much less theoretical, motivation for doing this.

  • $\begingroup$ Thank you for answering my question and confirming my doubts! Much appreciated. $\endgroup$ – user4317686 Oct 27 '15 at 14:44
  • $\begingroup$ @user4317686 Thanks for the "check" indicating I answered your question. How about a +1 too? (I'm new to CV and trying to grow my points.) $\endgroup$ – Mike Hunter Oct 28 '15 at 9:45
  • $\begingroup$ I tried to give you a +1, but stackexchange won't let me do it since I am too new to the site. It's saying I need to earn reputation points before I can give out +1s. :( sorry! i tried. $\endgroup$ – user4317686 Oct 28 '15 at 20:18
  • $\begingroup$ Thanks! It takes a min # of points...so, no worries... $\endgroup$ – Mike Hunter Oct 28 '15 at 20:36

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