The monthly household incomes of 8 families are given as :
{45000, 50000, 75000, 60000, 48000, 54000, 68000 and 150000}
Find the average income. Does the mean income give a fair idea of the average household income?
68750, No
Mean household income = Sum of IncomesNumber of Households
= 45000+50000+75000+60000+48000+54000+68000+1500008
= 5500008
= 68750
If we don't take the final value into consideration, since it is way above the rest of the households, we get :
Mean = 45000+50000+75000+60000+48000+54000+680007
= 57142.85, which is 11607 less than the mean income if taken for all 8 households.
6 values of incomes out of 8 lie below the mean, which means this is not a correct projection for the Average.
Thus, the mean income does not give a fair idea of the average household income for this data.