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.
When we talk about numbers, we sometimes want to know what the “middle” number is. There are two ways to figure this out: the median and the average.
The median is the middle number when we put all the numbers in order from smallest to biggest. Imagine you and your friends are all lined up from shortest to tallest. The friend in the middle of the line is like the median.
The average, on the other hand, is when we add up all the numbers and then divide by how many numbers there are. Imagine you and your friends all have a number that represents your height. To find the average, you add up everyone’s number and then divide by the number of friends you have.
So, the median is the middle number in a set of numbers when they’re put in order, and the average is when you add up all the numbers and then divide by how many numbers there are.
Average is where u take every persons income and add it up, then divide by how many people you counted.
Median is finding out what the person who is in the middle of the pack earns.
These two things are not always the same.
If you have 10 people earning medium wage, and 5 people earning super high wage. Then the average will be a lot higher than the medium wage, but the median will be the medium wage. In this way the median better respresent the “average person” because it doesn’t get impacted by super high (or low) earners.
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.
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.
When we talk about numbers, we sometimes want to know what the “middle” number is. There are two ways to figure this out: the median and the average.
The median is the middle number when we put all the numbers in order from smallest to biggest. Imagine you and your friends are all lined up from shortest to tallest. The friend in the middle of the line is like the median.
The average, on the other hand, is when we add up all the numbers and then divide by how many numbers there are. Imagine you and your friends all have a number that represents your height. To find the average, you add up everyone’s number and then divide by the number of friends you have.
So, the median is the middle number in a set of numbers when they’re put in order, and the average is when you add up all the numbers and then divide by how many numbers there are.
Average is where u take every persons income and add it up, then divide by how many people you counted.
Median is finding out what the person who is in the middle of the pack earns.
These two things are not always the same.
If you have 10 people earning medium wage, and 5 people earning super high wage. Then the average will be a lot higher than the medium wage, but the median will be the medium wage. In this way the median better respresent the “average person” because it doesn’t get impacted by super high (or low) earners.
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.
If you have a bunch of numbers, the median is the point where half of the numbers are higher, and half are lower.
Average is what you get if you add all the numbers and divide by how numbers you added.
Example: you ask 7 people how many boxes of cereal they have in the cabinet at home and their answers are 0, 1, 1, 2, 3, 4, 5. The median is 2 because half the people had fewer and half had more. The average is (0 + 1 + 1 + 2 + 3 + 4 + 6) / 7 = 2.43.
If you have a bunch of numbers, the median is the point where half of the numbers are higher, and half are lower.
Average is what you get if you add all the numbers and divide by how numbers you added.
Example: you ask 7 people how many boxes of cereal they have in the cabinet at home and their answers are 0, 1, 1, 2, 3, 4, 5. The median is 2 because half the people had fewer and half had more. The average is (0 + 1 + 1 + 2 + 3 + 4 + 6) / 7 = 2.43.
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