Tuesday, January 10, 2006

a few words from the wise one

[Permalink] Means and Medians (1/11/2006) The follow item appeared in Ta Kung Pao:


When it comes to income statistics, there are two numbers that are usually cited. The mean is the arithmetic average of all the incomes (that is, you add up the incomes of everybody and you divide that by the number of people (or households)). The median is the income level for which half the number of people make less than and the other half make more than. It is a virtual certainty that the mean is larger than the median (and this is true even during the Cultural Revolution when almost everybody made 36 yuan a month but there were still a few that made a little bit more). For example, in the United States, the mean household income is about US$75,000 but the median household income is only about US$44,000. The explanation is the Bill Gates effect -- the presence of Bill Gates will bring the mean income up significantly, but it will not affect the median all.


Now let us go back to the statement -- more than half of the peasants have family income lower than the national average. In other words, this is a statement that the median family income is lower than the mean family income. Nobody expects otherwise. This is a vacuous statement. What is it in the opening paragraph? The rest of the article is okay, but this statement is either stupid or else an attempt to mislead.



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