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Suppose you’re on a bus with forty-nine other people. At the next stop, the heaviest person in America gets on. Question: By how much has the average weight of the passengers increased? Four percent? Five? Something like that? Suppose the bus stops again, and on gets Bill Gates. This time we are not concerned about weight. Question: By how much has the average wealth risen? Four percent? Five? Far from it!
Let’s calculate the second example quickly. Suppose each of fifty randomly selected individuals has assets of $54,000. This is the statistical middle value, the median. Then Bill Gates is added to the mix, with his fortune of around $59 billion. The average wealth has just shot up to $1.15 billion, an increase of more than two million percent.