Question

Why do we use average to compare the development of country. Are their any limitations to this uses?

Answer 1

1) Usually, ‘average income’ is used to compare development of different countries.
2) Total income cannot be directly compared as population of each country differs. Hence ‘average’ is used to compute how much income each person earns.
3) At the same time, ‘average’ can be amisleading indicator, so as a measure of equality.
4) i.e. how equally incomes are distributed among people is often unknown.
5) This is as a result of high inequality of incomes lasting in the society.



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Answer 2

We use averages because they are useful for comparing differing quantities of the same category.

For example, to compute the per capita income of a country, averages have to be used because there are differences in the incomes of diverse people. However, there are limitations to the use of averages. This does not show the distribution of thing between people. For an example, suppose in a country, the annual income of a rickshaw puller is Rs 8,000 while an MNC employee earns an annual package of Rs 12,00,000. The average income of this country, therefore, will be Rs 6,05,000. Here actual income or status remains unknown. One can clearly consider this as a rich country thereby ignoring the income disparity between two individuals. Averages are useful for comparison, they also hide disparities.