The Million Dollar House That Fooled the Mean
Theo was making a poster about the five houses on his street. All five had been sold in the same year. Four of them sold for $200,000, $210,000, $220,000, and $230,000. The fifth was a huge house, and it sold for $1,000,000.
Theo wanted a single number that would show what a typical house on his street costs. First he tried the mean. To find the mean, you add up all the numbers and divide by how many there are. The total was $1,860,000, and dividing by 5 gave $372,000. Theo frowned, because not one house on his street cost anywhere near that much. In fact, four of the five had sold for much less.
His teacher recommended the median instead. To find the median, you line the numbers up from smallest to largest and pick the one in the middle. Theo's middle number was $220,000. That number described the street much more honestly.
The giant house is called an outlier, which is a number far away from the others. An outlier can pull the mean up or down a lot, but it hardly moves the median. If the big house had sold for $250,000, the mean would have been $222,000, very close to the median. Theo learned that both numbers are useful, but he must think about which one tells the truth.