2 min read.Updated: 15 Feb 2016, 08:44 PM ISTTadit Kundu
Mean incomes do not capture the material well-being of the average individual
New Delhi: Every high school student knows that arithmetic mean—the most popular method to compute averages—can be distorted by extreme values that are very much larger or smaller than most other values in a series. Since per capita income calculations are arithmetic mean-based, they also suffer from this handicap. Hence, it might be misleading to believe that mean incomes would capture the well-being of the average individual—those who are in the middle of the income distribution—in a country. A better way of finding out this is to use median income levels. In statistics, median is meant to capture the value of the middle item in a distribution.
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