Navigating the Demand Anomaly Myth: The Right Way to Deal With Outliers

The purpose of this article is to dispel misconceptions surrounding outliers and highlight their significance in statistical modeling. Outliers often yield crucial insights into the underlying relationships in the data being modeled, particularly in consumer behavior modeling. In this article I discuss how planning professionals tend to discard these anomalies or average them out, mistakenly believing it enhances the data’s structural integrity. I discuss how this false assumption can lead to the removal of valuable insights from the data, and provide a practical framework for treating outliers in statistical ...