(Sorry for any ignorance on my part. Any assistance is appreciated, so thanks in advance.)
Now and again you’ll see graphs like [this](https://www150.statcan.gc.ca/n1/pub/75-006-x/2015001/article/14194/c-g/c-g01-eng.gif) and [this](https://equitablegrowth.org/wp-content/uploads/2019/03/fig1.png). They seem pretty easy to understand at first–the fifth quintile (or top 20% of the population) holds significantly more wealth and income than the fourth, third, and so on.
However, I have heard that these graphs are actually a bit misleading because the reason why the top quintile is richer is simply because the quintiles measure households rather than individuals and the households in the top quintile contain more people. In other words, the top quintile isn’t richer, it’s just got more people and therefore more cash.
Is this true? If so, what does it mean for wealth inequality? Especially on an individual level? And why is it measured this way?
In: Economics
It may be true they count households. But super rich people don’t have more people in a household on average. And even if they would, the amount of wealth held by a few billionaires skews the average so much that average/mean become terrible to measure what the average person owns.
The median is a much better measure for average wealth of a group. And comparing it to the mean gives a good sign for how unequal things are.
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