My Math Forum Finding average salary from many inputs of all ranges

 September 26th, 2008, 03:43 PM #1 Newbie   Joined: Sep 2008 Posts: 1 Thanks: 0 Finding average salary from many inputs of all ranges how would i find the average salary if a group of salary ranges are 30 to 70k and then a few odd ones that are like 150 to 200k a year? the odd ones will throw off the average. so a bell curve? what would be the written out math to perform this operation? thanks
 September 27th, 2008, 11:51 AM #2 Global Moderator     Joined: Nov 2006 From: UTC -5 Posts: 16,046 Thanks: 938 Math Focus: Number theory, computational mathematics, combinatorics, FOM, symbolic logic, TCS, algorithms Re: Finding average salary from many inputs of all ranges I think the question is "what is a good measure of the central tendency for the salary of a group of people"? The median would be one usual measure, as would "drop the top 10% and the bottom 10%, and average". The geometric mean also works if everyone has a job.
 November 4th, 2008, 05:43 AM #3 Member   Joined: Aug 2007 Posts: 93 Thanks: 0 Re: Finding average salary from many inputs of all ranges Income in general follows a pareto, or power law distribution with a CDF of the variance is usually infinite which is why percentiles are used to describe the data Think about drawing random samples of 1000 people from around the world and attempting to do standard sampling methods, you will get roughly 1/3 at a few hundred dollars per year, another 50% or so between $1000 and say$20000 and then 10-15% in developed countries that make over \$30 K. If you happen to get one of the top 0.5% in the draw, say Bill Gates, their individual income will be more than everyone else in the sample combined

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