I occasionally have discussions on blogs where basic statistics concerning “averages” is useful. Rather than referring to another site that explains these statistics, I thought I’d try to summarize them here.
Imagine a town, Sudsville, located on a beautiful lake. The town grew around a thriving, prosperous family-owned industry that has made soap for 3 generations. The soap facilities are in a low-polluting industrial park with a railroad running through both the town and the park.
The town has 5 major income brackets and oddly enough, they tend to group into different neighborhoods. Each of the colored squares here lists the average income of the various neighborhoods. The size of each rectangle is proportional the the number of people living in the neighborhood which by percentage of the town’s population are:
- $12,000/yr: 15%
- $40,000/yr: 30%
- $80,000/yr: 25%
- $210,000/yr: 20%
- $1,000,000/yr: 10%
Given the above, the following question is a classic problem for both elementary statistic and policy courses: If someone were to ask you for the average income in Sudsville, what number would you give? If you are not familiar with this problem, please take a moment to jot down your answer before clicking “more”.
Triangulations 