How is the lower limit for detecting outliers calculated in Excel?

The calculation of the lower limit for detecting outliers in a dataset is based on the interquartile range (IQR), which helps identify values that fall significantly below the lower quartile. To find outliers, you first calculate the lower quartile (Q1) and upper quartile (Q3) of the dataset. The formula for detecting outliers applies a factor to the IQR, which is the difference between Q3 and Q1, effectively creating a boundary for what constitutes an outlier.

The correct approach for calculating this lower outlier limit is to subtract 1.5 times the IQR from Q1. This is because any data point that is lower than this limit can be considered an outlier. The formula reflects this understanding by first determining Q1 and then subtracting a multiple of the IQR from it, which ensures that we are accounting for variability in the dataset while identifying potential outliers.

Therefore, the correct calculation uses the formula that subtracts 1.5 times the IQR from Q1, accurately allowing for the identification of any unusually low data points that may skew the analysis. This systematic approach is crucial in statistical analysis and helps maintain the reliability of findings by filtering out extreme values.