“Often an average is such an oversimplification that it is worse than useless.” – Darrell Huff, How to Lie with Statistics.
We don’t really think about averages. The average hospital costs for hepatitis A was $16,000 in 2017. The average student loan debt for North Carolina residents is $36,000. The average American says they’ll spend $142 on Valentine’s gifts. Men, on average of course, say they’ll spend more than women.
For some things in life, average is fine. When my daughters were born, the hospital gave us a growth chart for their height and weight. It showed deciles and right in the middle was average. Growth charts are simple. Height. Weight. Plot. On chart meant on track, physically at least.
Now my daughters are twelve and ten and wow how things changed. New parents can track their child’s sleep, diet, movement—bowel or otherwise. And it’s not just parents. Everyone can track their taken steps, hours slept, and Spotify streams.
With technology, counting is easier.
With counts, averaging is easier.
Numbers are tools. Rather than bartering bananas for bread we have dollars and cents. With numbers, stores count their bananas bundles. With numbers, people have balanced budgets.
Numbers are tools. Like other tools, they take practice with feedback to build proficiency. I’m much more careful with the occasional use of power tools than the regular use of a chef’s knife. Numbers are like that. Well practiced and well used, numbers are a unique and powerful tool.
An example of numbers telling another story was the sabermetrics revolution in baseball. Smart teams realized that walks are better than hits, and that walks cost less to buy. Worth more, cost less. It’s like the successful Miller Lite advertising campaign: ‘tastes great, less filling’.
Decades later, sabermetrics happened in basketball with the insight that making one-third of three-point shots was the same as making one-half of two-point shots. Life, like sports, uses numbers more.
Numbers, though hidden in code, will become more prevalent in life and more important.
Average, as numbers go, is often abused. This is due to many reasons, but just like technology has reduced the cost of tracking a baby’s bowel movements, average is used because the cost is low. It’s sixth-grade math. And it can hide important nuances.
For example, the average student loan borrower owed $28,000 in 2016. If we dig a bit deeper we find:
- The median debt was $17,000.
- The median for two-year degrees was $10,000.
- The median for a four-year degree was $25,000.
- One-in-four borrowers owed less than $7,000.
- Only 7% of borrowers owed more than $100,000.
Those details are often omitted from the story. One poll showed that people viewed median debt of $17,000 as the “least bad figure about student loans”. Life is nuanced but numbers are not. Framed influences the way numbers are understood.
Thanks for reading.
4 thoughts on “Average Lies”
AKA averages in Extremistan.
Averages are useless when you’re looking at fat tails. Less useless under gaussian distributions.
His ideas are in everything I see.
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