The correct statement regarding the distribution of income in the context of extreme wealth is:
Due to the skew, the median will be a better measure of center for this data than the mean.
This is true because income distribution is typically right-skewed, meaning that a small number of individuals have extremely high incomes, which can disproportionately affect the mean. The median, being the middle value, is less affected by these outliers and provides a better measure of central tendency for skewed data.
The other statements are not correct:
- The standard deviation may not be a good measure of spread for skewed data due to its sensitivity to outliers.
- In a boxplot, the sections may not be of equal width in cases of skewness.
- In a right-skewed distribution, the mean is generally greater than the median, not the other way around.