Question

When looking at data on income for a population in the United States, why is it...

When looking at data on income for a population in the United States, why is it more important to know the median than the mean income number?

What are the chances for confusion from misinterpretation?

Homework Answers

Answer #1

The data on income for population in the United States is skewed data. Since most of the individuals have lower income, as compared to the income of the some richest person. Due to which the distribution is not symmetry and for a skewed data median is the most appropriate measure of Central tendency. Since median is a positional average it is least affected by an extreme observations. Mean is highly affected by Extreme observation.

Therefore it is more important to know the median than the mean income number.

Income data is negatively skewed, due to which the mean is pull in the direction of outliers. Therefore there is a chance that we may not correctly interpret the mean as it does not correctly indicate the centre the data. Thus there is a chance that we underestimate the average income for population in the United States.

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