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Q: Mean American income with and without Bill Gates ( Answered,   1 Comment )
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 Subject: Mean American income with and without Bill Gates Category: Business and Money > Economics Asked by: uniace-ga List Price: \$4.00 Posted: 05 Sep 2006 21:00 PDT Expires: 05 Oct 2006 21:00 PDT Question ID: 762586
 ```Please help me by finding the following information which the professor of my statistics class remembers seeing somewhere but cannot now find: the mean American income calculated both with and without Bill Gates included. If it helps, Wikipedia pointed toward this Census page, which has the mean American household income at \$60,528 in 2004: http://pubdb3.census.gov/macro/032005/hhinc/new06_000.htm the values we're in search of may be for individuals or households. they would probably have been done using data from within the last 16 years. anything within that range is acceptable. this information, if it can be found, is meant to serve as an example of how the mean as a measure of central tendency is susceptible to the influence of outliers (especially extreme ones). thank you``` Request for Question Clarification by bobbie7-ga on 05 Sep 2006 21:43 PDT ```Uniace, Is this by any chance what you're looking for? "For example, consider what would happen to the average of your city's household income if Bill Gates lived in your city: If there are 10,000 people in your city and everyone earns \$50,000 annually except Bill Gates who makes \$100,000,000, the mean is \$59,995. The median is \$50,000, and it can be argued that this more closely represents the population." BBER - Research Bureau of the UMD School of Business and Economics. http://www.d.umn.edu/lsbe/departments/bber/projects/ABA/bberFeb2001.pdf Bobbie7``` Clarification of Question by uniace-ga on 07 Sep 2006 15:57 PDT `Yeah sure, that's good enough.`
 ```Uniace, I'm pleased my findings work for you. "For example, consider what would happen to the average of your city's household income if Bill Gates lived in your city: If there are 10,000 people in your city and everyone earns \$50,000 annually except Bill Gates who makes \$100,000,000, the mean is \$59,995. The median is \$50,000, and it can be argued that this more closely represents the population." BBER - Research Bureau of the UMD School of Business and Economics. http://www.d.umn.edu/lsbe/departments/bber/projects/ABA/bberFeb2001.pdf Best regards, Bobbie7```
 ```Bill Gate's net worth fluxuates greatly year by year because he is invested heavily in the stock market. What you would consider his real income (his pay from Microsoft) probably isn't all that high. Let's assume it's a HUGE amount (which I doubt) at \$1 Billion per year. If you divide his pay by the 300 million people or 100 million households in the US then the effect is almost 0: \$1 billion / 300 million people = \$3.33 \$1 Billion / 100 million households = \$10 So if Bill Gates makes \$1 Billion every year and gave away every penny he made then the average household in the US could fill up 1/3rd of their gas tank every year on his generosity. When looking at the skew of means on such a large population, it is rare that 1 outlyer makes a big difference. If you look at the 5000 richest people or if Bill Gates were to make \$1 Trillion per year, then there would be significant results.```