Wordsmiths sometimes dislike numbers, or at least have a hard time grasping them. These words offer us an opportunity to better understand numbers and use their terms more precisely in writing and speaking.
Let's say we have a set of numbers:
- 11
- 23
- 30
- 47
- 56
The mean, sometimes called the arithmetic mean, of this set is 33. The mean is the sum of all the numbers in the set (167) divided by the amount of numbers in the set (5).
The median is the middle point of a number set, in which half the numbers are above the median and half are below. In our set above, the median is 30. But what if your number set has an even number of, er, numbers:
- 11
- 23
- 30
- 47
- 52
- 56
To calculate the median here, add the two middle numbers (30 + 47) and divide by 2. The median for our new list is 38.5.
So far, so good. But what about average? The average of a set of numbers is the same as its mean; they're synonyms.
Let's see our terms in action:
Performance is calculated by the arithmetic mean of the returns in an equally weighted portfolio of individual stocks, on a quarterly basis.
The median single-family homeowner in town will pay $175 more in property taxes this year.
Average retail gas prices in California fell 1.3 cents in the last week, putting the average tank of gas at $3.13 per gallon.
While we wordy types may still struggle to understand what an "equally weighted portfolio" is, wonder whether we are median single-family homeowners, or continue to look for lower-than-average gas prices, at least we know how the mean, median, and average were calculated.