When looking at an income distribution, it can be argued that individuals with income = 0 should be removed from the distribution. What would you expect to see happen to the standard deviation if those with income = 0 were removed from this data? Explain your reasoning.
- [1 mark] The standard deviation should decrease.
- [1 mark] 0 is the minimum value so by removing it, the lowest values are being removed.
- [1 mark] This would make the remaining observations closer together and therefore decrease the standard deviation.