A data analyst is preparing a report on annual employee compensation. The dataset includes salaries for all employees, from entry-level positions to C-suite executives. The analyst observes that the salary distribution is heavily skewed to the right because of a few extremely high executive salaries. To communicate the most representative measure of a 'typical' employee's earnings without being distorted by these high values, which of the following mathematical functions should the analyst primarily use?
The correct answer is the median. In a dataset with a skewed distribution, such as salary data with a few very high earners, the median is the most appropriate measure of central tendency. The median represents the middle value and is not significantly affected by extreme outliers. The mean would be pulled upwards by the high executive salaries, giving a misleadingly high representation of a 'typical' salary. The standard deviation is a measure of data dispersion or spread around the mean, not a measure of central tendency. The mode, which is the most frequent value, is often not suitable for continuous data like salaries and may not provide a meaningful 'typical' value.
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