Question

Why do we use average ? Are there any limitations to their use? Illustrate with your example related to development?

Answer 1

Uses and limitations to the use of average.

Uses:

• Averages are used to compare differing quantities of the same category.
• For example, to compute the per-employee salary of an organization, averages have to be used because there are differences in the salaries of several employees.

There are limitations to the use of averages:

• Even though they are helpful for comparison, they may also hide disparities.
• For example: Per capita income does not show the actual distribution of income.