The U.S. government keeps statistics on many people in America. One interesting

Question

The U.S. government keeps statistics on many people in America. One interesting statistic is the poverty rate. To be living in poverty, one must earn income below a certain threshold (approximately $900 per month). Many multimillionaires are included in this statistic. Recently, Barbara Streisand was "living in poverty." In a particular year, she did not perform live, and her album sales were extremely slow. She has a great deal of wealth but had little income that year. Although she has more money than 99.99% of the rest of the population, the government believed that she was impoverished. What other statistic can you name that is misleading? Why?

Explanation / Answer

Here the data is irrelevant because of the fact that the collected data does not contain information of wealth of the person. When marking a poverty line the assets as well as current earnings is to be considered. The mean income attained throughout the year is to be considered. Income may not be fixed for business men. That means income is a varying quantity. Whenever we are stating about mean it is good to state about the variability of mean. The variability indicates whether mean value has a stability or not.

          In the given problem the statistic become irrelevant because the statistic is based on a single sample. When more samples are collected and a statistic based on several samples is calculated then the error in statistic can be minimized.

The value of sample standard deviation may be misleading or incorrect. The reason may be the statistic are calculated on not a representative part of the population.

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