I need help with my statistics homework?

Question

the median net worth of households headed by someone younger than age 35 is $11,600. The mean net worth of these same young households is $90,000. What explains the difference between these two measures of center?

Answer 1

The answer is in the definition of median and mean. Let me demonstrate:

Below are 11 households with following net worth:

$8,000.00

$8,200.00

$8,400.00

$9,000.00

$9,500.00

$11,600.00

$30,000.00

$150,000.00

$180,000.00

$260,000.00

$315,300.00

Step 1:

arrange net worth starting with the lowest to the highest:

Find the median (the net worth in the middle), that is #6 ($11,600).

Now take the average or the mean: You total all net worth ($990,000) and divide by # of households (11). The mean is $990000/11 = $90,000.

The most important thing to learn is how people use these definitions to manipulate opinions.

A politician might tell you that the average income per household is $80,000. Unless you know exactly what that means, you may say people in the US are really making big money. Actually, such a quote tells you very little about the income per household. With the same total income, the median household income in the US is about $42,000. Now this tells you something. It tells you that one half of American families have less income than that. Compare the median to the mean ($42,000 vs $80,000) it tells you that the income distribution is very skewed, with a small number of people having enormous incomes.

That's why some politicians want to take from the rich and give it to the not so rich (usually the democrats)