When average is not average…
“A survey of six students in my class shows that the average pocket money earned is $28 each week.” But, wait a minute! Five of these students earn less than the average! Imagine how they feel? What is going on with this survey data?Let’s have a closer look…
Yes, the data shows what is going on here. Five students do indeed earn less that $28 a week, simply because Student 6 earned so much more than anyone else – $80. So, for many data sets, the average is unreliable as it can be easily distorted by very high or low figures (called “outliers”). Of course, some people will use average to their own statistical advantage. For instance, five students from my class could go home and tell their parents that the average pocket money earned in the class is $28 and that they should be getting this amount too!
There was a similar difference recorded recently for average salaries in New Zealand. Here is a summary, taken from the news article here:
“Employee representatives and a financial commentator say figures from a job website showing the average wage for New Zealand workers is more than $70,000, is unrealistic and sends the wrong signal to new immigrants.
Seek‘s latest salary report, released today, showed the average salary for jobs advertised on their website, grew to $72,731 per annum – a 1.3 per cent increase on wages since January.
The company’s general manager Janet Faulding said rising employer confidence in the economy was slowly filtering through to the job market, resulting in increased wages and more opportunities for job hunters.
“Businesses across all sectors and of all sizes are telling us that they are doing well at the moment and we expect to see further modest increases in salaries to attract and retain talent this year.”
Figures from Statistics NZ show as of March this year, the average hourly wage was $27.48 or $57,158.40 per year.”