Have you ever heard someone saying, “The average salary in this company is $100,000”, and the first thought that comes to your mind is,“Wow, sounds great!”? But before you update your resume and apply for a job at that company, let’s take a step back.
The word “average” often hides more than it reveals.
In statistics and explaining data, the term “average” is typically used to refer to the mean — which is the sum of all values divided by the number of values at hand. However, this number can be highly ambiguous regarding real-world decisions. Reason? Because averages don’t account for extremes (outliers), they often ignore what’s typical.
Mean vs Median: The Real Story?
To accurately understand how averages can mislead, we need to compare two foundational statistical concepts: the mean and the median.
- Mean = (Sum of all values) ÷ (Number of values)
- Median = The middle value when all the numbers are arranged in order
Let’s break it down with a simple example.
Employee Salaries Example
Employee | Salary ($) |
A | 30,000 |
B | 35,000 |
C | 40,000 |
D | 45,000 |
E | 50,000 |
F | 200,000 |
G | 250,000 |
- Mean Salary = ($30k + $35k + $40k + $45k + $50k + $200k + $250k) ÷ 7 = $92,857
- Median Salary = $45,000
Surprised?
The mean says the “average” employee earns almost $93k — but the median shows that most employees earn less than half of that. Why the enormous difference? Because the two high salaries (outliers) drag the mean upward, misrepresenting reality for everyone else.
Real-world Situations Where Averages Mislead
The misuse of averages affects how we interpret news, economics, education, and even our private finances.
1. Income Reports
In some cases, governments or organizations report average (mean) income. In many countries, this is, of course, far higher than what most people earn. Why is that so? Because top earners disproportionately increase the mean, even if the rest of the population is struggling.
2. Real Estate
Imagine a neighbourhood with primarily modest homes and a few luxury mansions. The average home price might look unaffordable on paper; instead, the median would tell a more realistic story.
3. Education
In a class, the average score of 70 doesn’t mean most students scored around 70. It might be that half scored below 60, but a few scored 95+, pulling the average up.
Why People Fall for the Average Trap?
So why does this happen so often?
- Simplicity: The mean is easy to calculate and sounds authoritative.
- Lack of context: People assume “average” means “typical,” which isn’t always true.
- Persuasion: In some cases, the averages are cherry-picked to make things seem all rosy and better than they are — mostly in marketing, reports, or media.
How to Avoid Being Misled?
So, what is the key to avoiding being misled by these fancy terms; here are some tips to think more critically about data:
- Always ask: What kind of average is this? Be curious and ask questions such as is it the mean, median, or mode?
- Check for outliers: See if a few extreme values are skewing the data.
- Look for distribution info: Are percentiles or ranges available?
- Consider the context: Try to decode what story the data is trying to tell — and is anything being left out?
Quick Infographic Idea: “3 Questions to Ask When You Hear ‘Average’”
Before jumping to any conclusion and getting overwhelmed by the data, check these three basic questions to validate the provided information.
- Is it the mean or the median?
- Could outliers skew it?
- What does it say about “most people — not just the total?
The average trap is everywhere — in headlines, reports, and boardroom presentations. But you do not have to be a statistician to differentiate between these basic data-related information, as now you know better. The next time someone tells you “The average is…” don’t just go ahead. Ask questions, look deeper, and remember: averages can hide just as much as they reveal.
In the world of data, the truth often lies beyond the mean.
Be data-informed!
