05/05/2005: Revisiting statistics....
Bryan at Why Now? reminds us of the deceptive nature of what statisticians like to call a certain "measure of central tendency", the "arithmetic mean" (you're probably more familiar with it as "average"):
When you hear people talking about money you have to watch the words that they use. One of the most important ways to "lie" about income is to convince people that "median" and "average" mean the same thing, and they most definitely do not.I have a favorite story, probably apocryphal, which illustrates the point in a memorable way. I've used it before in this very spot, but it's worth dusting off again.
If you have a company where 100 people make $10/hour, 5 people make $20/hour, one makes $40/hour, and the CEO makes $500/hour, the median income is $10/hour while the average income is $15.33/hour. Note that only seven of 107 people in the company make at least the average income.
When someone like Wal-Mart tells the world that the average salary for their company is $19,000/year, they don't say how many of their employees actually make that much money. When the top salaries in a corporation are measured in hundreds of thousands or millions of dollars, the average can rise remarkably.
I'm told that the Geography Department of the University of North Carolina used to tell prospective geography majors that the average salary of UNC alumni who took their degrees in geography was $250,000 per year.
What they didn't tell their prospective majors was that one of those UNC alumni who took his degree in geography was a gentleman named Michael Jordan, who is better known for his achievements in a field other than geography.
Let s/he who has ears, hear....
Len on 05.05.05 @ 12:50 PM CST