What are outliers in a dataset?

Outliers in a dataset refer to data points that significantly differ from others in the same dataset. These outliers can exhibit values that are much higher or lower than the majority of data points, which can indicate variability in the measurement, experimental errors, or novel findings that warrant further investigation.

Identifying outliers is crucial during data analysis as they can skew statistical results and influence the performance of machine learning models. For example, if a company is analyzing sales data and finds an outlier at an extremely high sales figure, this could point to a unique transaction, an error, or a new market trend depending on the context. Therefore, understanding and properly handling outliers is essential for extracting meaningful insights from data.