                             # QUANTUM LEAPS

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## 6. Median -v- AverageIs there a better way of estimating an expected value than with an average?

The average can be described as a measure of central tendency. It is a single value that is meant to provide a fair estimate of a particular set of values. However, an average value may in some circumstances be flawed.

Extreme values in the population can shift or skew an average. As there are more extremely large (or extremely small) values, the average tends to move towards the extreme values. In considering average income, average weekly ordinary time earnings (AWOTE) may be skewed if there are very high-income earners in the population. The conclusion that an "average" person would earn AWOTE may be flawed. In this case, it is likely that an average person would earn somewhat less than AWOTE.

A variety of statistical techniques (eg standard deviation) provide indicators of the reliability (as a representative measure) of an average. A simple alternative measure is the median. The median is the middle value in a set of data. It is not influenced by extreme values, and as a result is considered by some to be a fairer representation of a set of numbers than an average.

## Other Articles in This Edition of Quantum Leaps

1. Civil Liability Act 2002 (NSW) NEW
The Civil Liability Act 2002 (NSW) has applied since 20 March 2002.
2. RTA-v-Cremona (2001) NSW CA 338 NEW
Calculating loss of superannuation benefit.
3. Entity Structure Analysis
A technique which can help pinpoint the key issues in a complex business structure.
4. Financial Discovery Matrix
What document do I need and where can I find it? Simplifying the perplexing.
5. Regression Analysis
A powerful way of examining business trends.
6. Median -v- Average
Is there a better way of estimating an expected value than with an average?
7. Husher-v-Husher (1999) HCA 47
Substance over form