Why do we use averages ? Are there any limitations to their use ? Illustrate with your own examples related to development
Answers
- We use averages because they are useful for comparing different quantities ofWe use the same category. For example:- to compare 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 doesn't show the distribution of thing between people. For an example , suppose in a country, the annual income of a rickshaw pullers is RS 8,000 while MNC employee earns an annual package of RS 12,00,000. The average income of this ,therefore,will be RS 6,05,000 . Here actual income differs between two individuals . Averages are useful for comparison , they also hide disparities.
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Solution:
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.