THE LAW OF AVERAGES

January 7, 2014 | Blog | By Lightbox

Did you hear the one about the statistician who put her head in the oven and her feet in the refrigerator?  She said “On average, I feel just fine!”

As someone who has spent his professional life working with statistics, a pet peeve of mine is the use of statistical averages to prove false and misleading arguments.

First of all, you need to understand the difference between “median” and “average” when used for statistical purposes.

The median of a set of numbers is the number where half the numbers are lower and half the numbers are higher.  The average refers to the sum of all values divided by the total number of values.

Statistical averages can be affected by what is called an “outlier” or a number far outside of the normal range of testing.  For example, in 2011, the average income of the 7,878 households in Steubenville, Ohio was $46,341.  But if just two people – Warren Buffett and Oprah Winfrey, relocated to Steubenville, the average household income would rise 62% overnight to $75,253 per household.  Warren and Oprah would be prime examples of outliers.

Did you know that the a student majoring in geography at the University of  North Carolina in the mid-1980’s earned an average income of $100,000?  Would that make  you want to call your child and tell them to change majors?  What if I told you that Michael Jordan majored in geography and graduated from UNC in the mid-1980’s?  Michael Jordan’s earnings would be an outlier.

Again, I work with statistics.  I am therefore not advocating that we give up on averages.  Used cautiously, they help to analyze patterns.  But, given the variety of circumstances that exist in the messy real world, please think twice before taking any “one-size-fits-all” advice given on the basis of averages.