EconStatsCraft › Box plot

Box plot

Several distributions side by side, each reduced to its median, quartiles and outliers. The chart to reach for when the question is whether groups differ in spread as well as in level.

What it needs

The intuition

A box plot compresses a distribution into five numbers - minimum, lower quartile, median, upper quartile, maximum - with outliers marked separately. It is unbeatable for comparing many groups at once, because five numbers per group stack neatly where five histograms would not. What it cannot show is the one thing a histogram can: whether the distribution has one hump or two.

When to use it

Whenever the question involves groups and the answer might be about spread rather than level. Two groups can share a mean and be entirely different distributions.

Where the estimator comes from

The box spans the interquartile range [Q_1,Q_3] with the median marked inside. Whiskers extend to the most extreme observations within Q_1-1.5\,\mathrm{IQR} and Q_3+1.5\,\mathrm{IQR}, and anything beyond is drawn individually. The 1.5 is Tukey's convention, chosen so that for Normal data about 0.7% of observations fall outside - roughly 1 in 150. It follows that in a sample of 1,000 Normal observations, about seven points will be flagged as outliers by construction, and none of them is anomalous.

What it assumes

Statistical properties

How to read the output

A worked reading

Take 1,000 draws from a clean Normal distribution and the box plot will mark about seven points as outliers. Nothing is wrong with them: the 1.5 IQR rule flags roughly 0.7% of Normal data by design, so the "outliers" are the expected tail of a well-behaved sample. Treating flagged points as errors to be removed - which happens routinely - deletes the tail of the distribution and biases every subsequent variance estimate downward.

Symptom → diagnosis → what to do

If you see thisIt meansDo this
Many points flagged as outliersExpected at 1.5 IQR, or a heavy-tailed variableNot automatically errors
A box with no whisker on one sideThe quartile equals the extremeCommon with small n or bounded data
Two groups with identical boxesThe shapes may still differOverlay the points or use a violin
A very small boxConcentrated data, or the wrong scaleCheck against a histogram
Comparing groups of very different sizesThe plot hides nPrint n under each box
Median at the edge of the boxStrong skewReal, and worth saying explicitly

Common mistakes

Where to read this properly

See also

Histogram, which shows the shape a box plot cannot. Descriptive statistics, for the five numbers as a table.

Related Charts

Line chart · Area chart · Bar chart · Stacked bar · Scatter plot · Bubble chart · Histogram · Pie chart · Heat map · Rebased to 100 · Lorenz curve and Gini

All analyses

Charts

Line chart · Area chart · Bar chart · Stacked bar · Scatter plot · Bubble chart · Histogram · Box plot · Pie chart · Heat map · Rebased to 100 · Lorenz curve and Gini

Maps

World map · Bivariate map · Flow map · India - state map · India - district map

Explore

Descriptive statistics · Summary by group · Two-way table · Classical statistical tests

Regression

Multiple regression (OLS) · Logit / Probit · Tobit (censored) · Truncated regression · Multinomial logit · Ordered logit / probit · Quantile regression · Poisson / Negative binomial

Time series - one series

Time-varying coefficients (Kalman) · Unit root tests · Correlogram (ACF / PACF) · ARIMA / SARIMA · Rolling-origin cross-validation · Theta method · Unobserved components · STL forecasting · Forecast combination · Markov regime switching · Change frequency (resample) · ARCH / GARCH volatility · Decompose & filter · Spectral analysis · Exponential smoothing · Forecast accuracy

Time series - several series

Yield curve (Nelson–Siegel / Svensson) · Dynamic factor model · Dynamic regression (ARIMAX) · Structural VAR · VAR · Granger causality · Cointegration · VECM · ARDL & bounds test

Panel data

Panel regression · Panel cointegration tests · Heterogeneous panel: Mean Group & PMG · Gravity model of trade · Dynamic panel GMM · Panel diagnostics · Panel unit-root tests

Multivariate statistics

Principal components (PCA) · Factor analysis · Cluster analysis

Marketing research

Conjoint analysis · MaxDiff (best–worst scaling) · TURF - reach of a product line · Price sensitivity (Van Westendorp) · Market basket analysis · Perceptual map · Scale reliability (Cronbach’s alpha) · Key driver analysis

Causal

Spatial autocorrelation · Spatial regression · Heckman selection · Instrumental variables (2SLS) · Difference-in-differences · Staggered difference-in-differences · Regression discontinuity · Matching & weighting · Oaxaca–Blinder decomposition

Finance & risk

Black–Scholes option pricing · Bond price, duration & convexity · Merton distance to default · EMI / home loan planner · CAPM / beta estimation · Multi-factor model · Portfolio optimization · Value at Risk & Expected Shortfall · Performance & drawdown · Time value of money & NPV/IRR · Equity valuation (DDM, FCF, residual income) · Cost of capital (WACC) · Binomial option pricing · Option strategies (payoff & profit) · Forwards, futures & swaps · Credit risk & Basel capital · Extreme value theory (tail risk)

Actuarial

Life table · Life annuity · Life insurance pricing · Chain ladder reserving · Buhlmann credibility · Survival analysis · Mortality graduation · Aggregate loss model · Ruin probability · Multi-state Markov model · Loss severity fitting

Tests & breaks

Monte Carlo experiment · F-test, Wald & Chow · Structural breaks & stability

Machine learning

Regression vs machine learning · Ridge / Lasso / Elastic Net · Random forest · Gradient boosting

Open the workspace →

Starting engine…

EconStatsCraft rigorous, plain-spoken econometrics

Econometrics that explains itself.

Regression, panel data, time series and the whole battery of tests. Every result is followed by a verdict you can defend.

Load a dataset to see it here.