Median vs Mean

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vnatale
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Median vs Mean

Post by vnatale » Thu Mar 09, 2023 8:37 am

Maddy wrote:
Thu Mar 09, 2023 7:55 am

Another factor not yet mentioned is the decline of the rule of law. You can no longer take a case to court and predict, within a reasonable margin of certainty, how it's going to come out because it's all arbitrary. The result is that investors and businesspeople cannot anticipate the consequences of their decisions. It's all a huge crap shoot.

My own solution is to just aim for the mean. (Yes, I know the term is actually "median," but the expression is what it is.) I think the writing is on the wall that the wealthy (including the traditional middle-class) are going to increasingly vilified and made to do penance for whatever inequality happens to be the focus of concern. We saw what happened to landlords during the CoVID scare. An unelected agency whose delegated powers were reserved to matters of public health unilaterally shut down their stream of income, making them the de facto parents of people who failed to pay their rent. This should be a huge wake-up call to anyone that thinks they are playing by the traditional set of rules where the industrious are rewarded and the improvident are allowed to fail.

I have no doubt that the Elite, as their own special class, have designed a way of preserving their wealth, but when their tools include the ability to manipulate markets and to bribe legislators, you and I don't have much chance of emulating what they're doing.


Only focusing on the above bolded ...

The "mean" and "median" can be widely different amounts.

The mean is the average as we traditionally think of it while the median is where half the amounts are above it while half the amounts are below it.

The classic example is if there were 10 people in a room with 5 having a net worth of $50,000, 1 having a net worth of $75,000, and 5 having a net worth of $100,000.

In this case the mean and the median would be identical - $75,000.

But if now Bill Gates walked in with his net worth of $100,000,000,000 then the median would stay around $75,000 to $100,000 but the mean would now be about $99,999,990,000.

Many years ago when I was taking a graduate school course statistics I went to something where the Commissioner of Baseball - Bowie Kuehn - was speaking.

He was complaining about how fast the average salaries of baseball players was raising.

During the following question and answer period I was hoping to trip him up by asking him if that average was the mean or the median.

I forget how he answered now (nearly 50 years later) but I know he impressed me that he did know the difference between the two of them. I'm thinking he must have said median.

Sorry to have not engaged in the actual topic but did want to clarify this.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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