Wikinvest Wire

More income for those with a lot of income

Thursday, February 12, 2009

You don't have to look very far in the Federal Reserve's most recent bulletin on U.S. family finances before you find something quite interesting - the very first chart is a graphic depiction of how skewed changes in income were during the housing and credit bubble.
IMAGE Anytime you get a huge difference between the mean and the median, you know there's been a big shift in the data. In this case, much larger increases at the high-end managed to push the average up a full 8.5 percent but the mid-point of all samples stayed put.

Translation: Those making a lot of money made a lot more, those who weren't made even less.


Anonymous said...

I like that Bill Gates example for understanding means and medians ---- when Bill Gates walks in to a room of 50 people, the average net worth goes up considerably, but the median net worth barely changes at all.

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