Question

The mean household income in the United States in 2014, according to the US Census Bureau, was $72,641, or $20,702 (39.86%) higher than the median household income ($51,939). What can you conclude, based on the difference between the mean and median household income, about the distribution of household income?

Answer 1

Solution: The mean household income is $72641, while the median household income is $51939. The mean income of households is 39.86% higher than the median income. Based on this information, we can clearly see there are some households with extremely higher incomes due to which mean value inflates. Therefore, we can say that the distribution of household income is positively skewed.