Question

Suppose I argued that “regular Americans” are doing far better economically than they were in the 1990s based on a chart showing a large increase in mean inflation-adjusted income per person since then. What’s the main problem with this argument? (a) It fails to take into account the increase in population that accounts for a large part of the rise in GDP. (b) It fails to take into account the effect of inflation over that time period. (c) It uses a measure of centrality which is sensitive to distortion by outliers. (d) It’s not based on a random sample of all American households

Answer 1

Since the mean is inflation-adjusted income , the study take into account the effect of inflation over that time period.

The mean is income per person so the population size has no impact on the study.

The mean is a measure of centrality which is sensitive to outliers.

Thus, assuming the study is based on a random sample of all American households, the main problem with this argument is,

(c) It uses a measure of centrality which is sensitive to distortion by outliers.