On the Difference Between Average and Median: Inheritance Edition

I came across this blurb, Average American Inheritance: $177,000.

Just a quick opportunity to remind ourselves that averages do not represent a “typical” state if the data are not normally distributed. Wealth is on a power distribution, not a normal distribution. Very different. Given that “only 56% [are] expecting to give inheritances to their children” my guess is that the median inheritance sits very close to zero.

The average holds no meaning here. If we’re studying the macroeconomy we would need to multiply the average back to the aggregate and/or look at the actual distribution.

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One Response to On the Difference Between Average and Median: Inheritance Edition

  1. I made the same mental comment this morning: average does not necessarily imply typical despite the medias conflation of the terms.

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