Question

When typical values are given for salaries and housing prices, the median is almost always given instead of the mean. Explain why that is

Answer 1

We must analyze the question to find the solution.

Step 01:

Data

Mean vs Median

Step 02:

Salaries and housing prices:

The mean is vulnerable to change from outliers values while the median remains fairly stable so long as the quantity of homes or salaries does not change drastically.

Consider 4 houses:

$80,000 $100,000 $140,000 $180,000.

With this set of houses, the mean is $125,000 and the median is $120,000.

Consider a change to either the highest or lowest number:

$80,000 $100,000 $140,000 $250,000.

The mean changes to $142,500 and the median stays $120,000.

The answer is:

The mean is vulnerable to change from outliers values while the median remains fairly stable so long as the quantity of homes or salaries does not change drastically.