What I Look at on the Internet

ilovecharts:

I found the last chart a bit misleading, so I fixed it, using Mean income, rather than median, and the same scale.

-picturesofmatchstickmen

Mean income is necessarily skewed by one’s inability to earn a negative income. Let’s say that we hypothesize our “average” income to be 30k/yr. The poorest individual can only deviate from the average by 30k, whereas the richest individual has an infinite set of numbers to influence the mean. Therefore, anybody making over 60k/yr is overvalued against the mean. Median corrects this issue. For example, every cent Bill Gates makes counts for the mean income, but counts the same as somebody making greater than 30k/yr for median income—Bill’s income registers (properly) as an outlier.

Also, the last chart used different scales because it was comparing growth ratio, not overall value. Using the same scale like you do here only helps if you establish some percentage of “average” income you deem acceptable for tuition.

one of the best explanations of why it’s stupid to use the mean when it comes to income.