Comments on: Rising Incomes and Falling Income Statistics http://cafehayek.com/2008/09/rising-incomes.html where orders emerge Mon, 16 Jan 2012 02:06:33 +0000 hourly 1 http://wordpress.org/?v= By: notsneaky http://cafehayek.com/2008/09/rising-incomes.html/comment-page-1#comment-29938 notsneaky Fri, 12 Sep 2008 02:37:52 +0000 http://localhost/wordpress/?p=3064#comment-29938 <p>But Bryan's essentially right in the sense that with more than three people, like say 260 million more, the thing about the median is not likely to work, unless you're getting HUGE inflows into the income pool (or unless the income distribution is symmetric, which it ain't). Which is precisely why folks who look at these sort of things like to concentrate on the median and not the average.</p> <p>And keep in mind that these are usually intertemporal comparisons, like 1975 vs. 2005. But there were folks entering the income pool in 1975 too, it's not a new phenomenon or anything (except possibly for immigration but then you gotta make that case with some hard numbers).</p> But Bryan's essentially right in the sense that with more than three people, like say 260 million more, the thing about the median is not likely to work, unless you're getting HUGE inflows into the income pool (or unless the income distribution is symmetric, which it ain't). Which is precisely why folks who look at these sort of things like to concentrate on the median and not the average.

And keep in mind that these are usually intertemporal comparisons, like 1975 vs. 2005. But there were folks entering the income pool in 1975 too, it's not a new phenomenon or anything (except possibly for immigration but then you gotta make that case with some hard numbers).

]]> By: Bryan http://cafehayek.com/2008/09/rising-incomes.html/comment-page-1#comment-29937 Bryan Tue, 09 Sep 2008 22:09:20 +0000 http://localhost/wordpress/?p=3064#comment-29937 <p>oops I stand corrected!</p> oops I stand corrected!

]]> By: Martin Brock http://cafehayek.com/2008/09/rising-incomes.html/comment-page-1#comment-29936 Martin Brock Tue, 09 Sep 2008 14:47:11 +0000 http://localhost/wordpress/?p=3064#comment-29936 <p>Conventionally, the median of three values is the central value, and the median of four values is the average of the two central values, so the median presumably does fall when you enter the room, unless the three billionaires have precisely the same wealth.</p> Conventionally, the median of three values is the central value, and the median of four values is the average of the two central values, so the median presumably does fall when you enter the room, unless the three billionaires have precisely the same wealth.

]]> By: Bryan http://cafehayek.com/2008/09/rising-incomes.html/comment-page-1#comment-29935 Bryan Mon, 08 Sep 2008 22:22:41 +0000 http://localhost/wordpress/?p=3064#comment-29935 <p>Actually if I walk into a room with 3 billionaires, the median income is unchanged and the average income falls. </p> Actually if I walk into a room with 3 billionaires, the median income is unchanged and the average income falls.

]]> By: Atabrat http://cafehayek.com/2008/09/rising-incomes.html/comment-page-1#comment-29934 Atabrat Mon, 08 Sep 2008 13:36:23 +0000 http://localhost/wordpress/?p=3064#comment-29934 <p>It's Simpson's paradox. The same issue came up when UC Berkeley was accused of discriminating against female applicants, when in fact it had a small bias against men.</p> <p>http://en.wikipedia.org/wiki/Simpson's_paradox</p> It's Simpson's paradox. The same issue came up when UC Berkeley was accused of discriminating against female applicants, when in fact it had a small bias against men.

http://en.wikipedia.org/wiki/Simpson's_paradox

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