Data Cleaning edit
'Cleaning' refers to the process of removing invalid data points from a dataset.
Many statistical analyses try to find a pattern in a data series, based on a hypothesis or assumption about the nature of the data. 'Cleaning' is the process of removing those data points which are either (a) Obviously disconnected with the effect or assumption which we are trying to isolate, due to some other factor which applies only to those particular data points. (b) Obviously erroneous, i.e. some external error is reflected in that particular data point, either due to a mistake during data collection, reporting etc.
In the process we ignore these particular data points, and conduct our analysis on the remaining data.
'Cleaning' frequently involves human judgement to decide which points are valid and which are not, and there is a chance of valid data points caused by some effect not sufficiently accounted for in the hypothesis/assumption behind the analytical method applied.
The points to be cleaned are generally extreme outliers. 'Outliers' are those points which stand out for not following a pattern which is generally visible in the data. One way of detecting outliers is to plot the data points (if possible) and visually inspect the resultant plot for points which lie far outside the general distribution. Another way is to run the analysis on the entire dataset, and then eliminating those points which do not meet mathematical 'control limits' for variability from a trend, and then repeating the analysis on the remaining data.
Cleaning may also be done judgementally, for example in a sales forecast by ignoring historical data from an area/unit which has a tendency to misreport sales figures. To take another example, in a double blind medical test a doctor may disregard the results of a volunteer whom the doctor happens to know in a non-professional context.
'Cleaning' may also sometimes be used to refer to various other judgemental/mathematical methods of validating data and removing suspect data.
The importance of having clean and reliable data in any statistical analysis cannot be stressed enough. Often, in real-world applications the analyst may get mesmerised by the complexity or beauty of the method being applied, while the data itself may be unreliable and lead to results which suggest courses of action without a sound basis. A good statistician/researcher (personal opinion) spends 90% of his/her time on collecting and cleaning data, and developing hypothesis which cover as many external explainable factors as possible, and only 10% on the actual mathematical manipulation of the data and deriving results.