At 07:46 PM 8/8/99 +0200, martin wrote:
>Milutin writes:
>>

        [... Example ...]
>
>1. Where did the $10 go that they each earned the first year and why
>did it go there?
>
>2. Why did the incomes of the nine drop to $1?  Are you saying that
>income is a zero-sum system?
>
>3. It looks like the nine each gave $9 to the one.  Why did they do
>that?
>
>4. Even if they did each give $9 to the one, they should have each had
>$1 left.  Then the $1 you say they earned in the second year would
>have taken them to $2 each.
>
>> They, as a group, were better off with a lower average because the
>> majority of them(9) had a higher income.
>
>I think I don't understand the example.
>

I think

1. The example should be taken as two separate examples, not as a two-year
story

2. The point of the example was just to show that averages can be
misleading when judging the 'wealth' or 'standard of living' of an economy.

The example doesn't seem to merit in-depth socio-economic analysis to me.

It might be worth noting that more sophisticated statistics, such as the
standard deviation, would be more representative of the economy than a
simple mean.


Hugh Denman