Question

A city council wants to get a sense of whether people are getting rich running short-term rentals in the city. You were given four choices regarding the  numerical summary of the short-term rental data for their city  that would be most informative for this purpose. Explain the advantages and disadvantages of each statistic.

maximum -

90th percentile -

range -

interquartile range -

Answer 1

1) The maximum value will only represent the highest rent in the place which doesn't answer the question "whether people are getting rich running short-term rentals"

2)  The 90th percentile is the lowest rent that is greater than a 90 percentage (“n”) of the rent. In other words 90th percentile means that 90% of the rental amounts are lesser than the 90th percentile value. This still doesn't answer the question "whether people are getting rich running short-term rentals" really well because it doesn't represent the information about the change in rent over time

3)Range which is the difference between the maximum value and minimum value is the data give the representation of how much the rent has increased over the years and it actually helps us to answer the question "whether people are getting rich running short-term rentals". The disadvantage is that the range is affected by the outliers (very high or very low rent which doesn't represent the entire population).

4) Interquartile range represent how far the highest and lowest rents were and they are not affected by outliers because they represents the difference between the third quartile(75th percentile) and first quartile (25th percentile)

P.S. A chronological collection of data and a line chart will answer "whether people are getting rich running short-term rentals" better