Society of Actuaries PA Practice Exam Study Guide

The purpose of the ggplot function in creating a bar chart for a factor variable is specifically to show counts of observations per factor level. In this context, factor variables often represent categorical data, and bar charts are particularly effective at visualizing the frequency of different categories. Each bar in the chart represents a level of the factor, and the height of the bar correlates with the number of observations within that category, thereby allowing for a clear comparison of the distribution of data points across the different levels.

This visualization is essential in exploratory data analysis, as it provides immediate insights into how data is distributed among different categories, which can inform further statistical analysis or modeling. By focusing on counts, the bar chart effectively communicates how many observations fall under each category, making it an ideal choice for representing categorical data in a clear and interpretable manner.