Which measure of income is affected by very high scores?

The average income is defined as the total income of a population divided by the number of individuals or households in that population. This measure can be significantly influenced by very high scores, or outliers, because the average reflects all data points. When a small number of individuals have exceptionally high incomes, it raises the overall average, which may not accurately represent the economic situation of the majority of the population.

For instance, if most people earn a modest income, but a handful of people earn millions, the average income could be skewed upward, providing a misleading picture of typical earnings within that group. This phenomenon highlights the limitations of using average income as a sole indicator of economic well-being.

In contrast, the median income measures the middle point of income distribution, whereby half of the population earns above and half earns below, making it less susceptible to extreme values. Real income adjusts for inflation, while disposable income accounts for taxes and other deductions, but neither is directly impacted by outlier data in the same manner as average income.