What Is a Dot Plot?

A dot plot is a simple form of data visualization that consists of data points plotted as dots on a graph with an x- and y-axis. These types of charts are u🐟sed to graphically depict certain data trends or groupings. A dot plot is similar to a histogram in that it displays the number of data points that fall into each category or value on the axis, thus showing the distribution of a set of data. There are two types of dot plots: the Cleveland and Wilkinson dot plots. This type of charting method is commonly used by the Federal Open Market Committee (FOMC).

Understanding Dot Plots

A dot plot visually groups the number of data points in a data set based on the value of each point. This gives a visual depiction of the distribution of the data, similar to a histogram or probability distribution function. Dot plots allow a quick visual 🧜analyꦯsis of the data to detect the central tendency, dispersion, skewness, and modality of the data.

Also known as strip plots or dot charts, dot plots are typically used for smaller sets of data. The points are arranged with one axis showing the range of values or categories along which the data points are grouped and a second axis showing the number of data points in each group. Dots may be vertically or horizontally stac🎐💧ked to show how many are in each group for easy visual comparison.

This is not unlike a 澳洲幸运5官方开奖结果体彩网:bar graph or a 澳洲幸运5官方开奖结果体彩网:line graph. The big difference is that dots on a dot plot are not connected via a bar or a line. Bar and line gr𝔍aphs connect the dots with a solid bar or a line. The two graphs, like a dot plot, have both an x- and y-axisಌ.

You can calculate the spread of the dots by subtracting the minimum value from the maximum value on the chart. The center of the dataset is called the median. Determining these values can help ๊you understand the distribution of values in the dataset. More dots in one particular area of the plot indicate a higher frequency of occurrence.

Types of Dot Plots

The key dot plot types are the Cleveland and Wilkinson dot plots. Both utilize dots; however, there are key differences, where Cleveland is akin to a bar 💯graph and Wil༺kinson is more like a histogram. 

Cleveland Dot Plot

The Cleveland dot plot lists the variable as a continuous one rather than a categorical variable just like a bar chart. But, unlike a bar chart, which uses length to relay position, Cleveland do💧t plots use position.

William S. Cleveland created the notion of a continuous variable in his book Elements of Graphing Data. The Cleveland dot p𓄧lot is useful when using multiple variables, as it doe🐠s not require the axis to start at zero, allowing for the use of a logarithmic axis.

Wilkinson Dot Plot

The Wilkinson dot plot was created by Leland Wilkinson. The Wilkinson dot plot helps standardize the dot plot form. It lays out data much like a histogram. Unlike a traditional histogram, the Wilkinson dot plot lays data out in individual points. A histogram, on the other hand, lays out the data in bins. Wilkinson's formation allows dots to be placed accurately rather than being spaced evenly.

Federal Open Market Committee (FOMC) Dot Plot

Dot plots are well known as the method that the Fed uses to convey its benchmark federal funds rate target range outlook at certain Federal Open Market Committee meetings. FOMC members place dots on the dot plot to d𒅌enote their projections for future interest rates in subsequen꧙t years and the long run.

The overall FOMC outlook for interest rates in any given year is typically reported as the median of the dots that show up on the dot plot. Th🏅e Fed's dot plot projections are closely watchꦓed by investors and economists for indications of the future trajectory of interest rates.

When you look at the FOMC chart, each dot represents a member's view of the range where rates should be at that time. Their dot is in the center of the range. In other words, the dots shouldn't be taken to represent that a member is targeting that specific number. Importantly, it is not known which dot belongs to which FOMC member.

It's also important to remember that the Fed is largely data-driven, and so it constantly adjusts its expectations and rates based on economic trends and global events. In the event of major developments, such as a severe economic downturn or a sharp jump in inflation, the most recent dot chart may no longer represent members' projections.

As a result, the longer-term projections on the dot plot carry less weight than those closer to the present. Changes among Fed leadership—as terms expire, people resign, and others step up to fill the vacated positions—add to the pot💫ential for long-term policy shifts.

The Bottom Line

Dot plots are similar to bar graphs or line graphs and are used for data visualization. T♍hese types of charts are used to graphically depict certain data trends or groupings. The Cleveland and Wilkinson dot plot🅺s are the two key types of dot plots.