Down These Mean Median Streets

June 11, 2014
Posted by Jay Livingston

For a quick illustration of the difference between mean and median, I often use the example of income. I choose a plausible average (mean) for the classroom population and review the math. “If Bill Gates walks into the room,” I say, “the average income is now in the billions. The median hasn’t has hardly moved, but the mean has gone way up.” So has the Gini coefficient.

Here’s a more realistic and global illustration – the net worth of people in the wealthier countries.  The US ranks fourth in average worth – $301,000 per person . . .

. . . but the median is far lower – $45,000, 19th out of the twenty nations shown.  (The graph is from Credit Suisse via CNN )

The US is a wealthy nation compared with others, but  “average” Americans, in the way that term is generally understood, are poorer than their counterparts in other countries.

But as with so many things, most Americans are unaware of how life is lived in other countries.  In our ignorance and arrogance, we just know that, although things may not be perfect here, they are in all respects better than anywhere else.  As Sen. Marco Rubio put it at the 2012 Republican convention, speaking about Democratic proposals on things like inequality and health care, “These are ideas that threaten to make America more like the rest of the world instead of making the rest of the world more like America.”

The key word, of course, is “threaten.”  Affordable health care for all,  a higher median net worth – are these a threat? Only in America – or, more accurately, Republican America.

1 comment:

Andrew Gelman said...

But if Bill Gates entered the room, the median income would go up, no? Not by much, but by a little (excepting the case in which a bunch of students in the median happened to have the exact same income).