[dahart]

> this is the oldest trick in the book: talk about the average when it tells the story you want to tell as opposed to the distribution.

That’s a little bit of FUD though; use of an average does not imply it’s being misused. All statistics can be misused when not cross-checked with other statistics, but just because it can be does not imply it is. And to be fair, citing emotional anecdotes and failing to look at the average or any other stats seems to be abused in reporting a lot more often than trying to be tricky with numbers.

The St. Louis Fed published a paper a few years ago [1] showing the distributions of earnings of college degree holders compared to non-degree-holders (called the “income premium”), and it backs up the story of the average here. The average graduate in the U.S. earns approximately double what people that stop at a high school education earn. I was very surprised by that stat, I had no idea the income premium was that big. Even though this Fed paper is arguing that the relative savings (“wealth premium”) is going down for college grads, it’s also pointing out that the income premium is not really going down, and on top of that they’re a little quiet about the absolute number of dollars people have in savings. When grads and non-grads have the same savings rate but one has twice the income, then that one also has twice the money at the end of the day, and the Fed paper argues that’s actually a break-even. (This is another old statistics trick…)

[1] https://research.stlouisfed.org/publications/review/2019/10/...