I was looking up the average networth of 30 year olds in the United States and it said: “The average net worth is $122,000 and the median net worth is $35,112” my brain is too smooth please help.
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Just want to give a reason why one matters, since I think it’s been explained well elsewhere what the definitions are.
Median is useful because it limits the effect of a big outlier. Let’s say there are a million 30 year olds in the united states. And every single one of them has a net worth of $10,000, except one guy who has a net worth of 50 billion dollars. The average net worth of 30 year olds in that sample is ~60k. The median is $10,000. So the average is skewed up hugely by that one outlier, but the median gives you a better sense of what most people in that population actually have.
So in your real life example, the average being much higher than the median, is a sign that there is a significant group of 30 year olds with very high net worths skewing the average up.
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