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.
In: 8
Mean (“average” typically) is the sum divided by the count. Aka: total earnings divided by number of earners. Gives an estimate of what you would “expect” a person selected at random to earn, but can be skewed a bit when for instance one person makes a $1million, and ten others make closer to $10thousand, the mean will be much higher than you’d intuit.
Median is “the earnings of the middle person”, so if you order everyone by how much they make, then count to the middle, whatever that person makes is the median. On its own, doesn’t tell you a lot of information, but combined with mean it can help paint a bigger picture.
In your example, median is well below average (mean). That means that the middle person (as well as half of everyone, since they make less than that person) makes less than the average. This suggest that there’s a lot of wealth at the very top, pulling the average up. An example would be sometime like: (1,1,2,3,33) the average is 8 (40/5), but the median is 2. That top end outlier pulls the average up, and more than half of everyone makes less than that average.
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