Yes! That’s him! That’s Vernon Martin, the
author of "The International Appraiser" blog, the blog that grabbed me and wouldn’t let me
go and forced me to read it 790,000 times! He's worse than Epstein!
For retailers or housing developers, which datum should be
used: average household income or median
household income? Average is another
name for the mean of the sample.
The median is the number that bisects the sample into halves. It is at the exact middle of the sample
when numerically ordered.
Median income is typically lower, and it is the statistic relied
upon by retailers, for good reason.
Let us look at the example of Irwindale,
California, a southern California city of 423 households, a median household income of $113,250 per year and average income of
about $121,972 per year. What would
happen to these statistics if Elon Musk moved to
Irwindale? Let us assume that Mr. Mr. Musk is earning $1 billion per year.
The median household income would change little, perhaps to
$113,251, the next wealthier household on the totem pole.
The average household income would jump enormously, calculated as
follows:
(423 x 113,250 + 1,000,000,000)/424 = $2,471,473 = avg household income
The average household income in Irwindale would have increased
more than 20-fold with the entry of the Musk household.
Which figure would matter more to the local supermarket? Will it sell 20 times as many groceries? Will the carwashes wash 20 times as many
cars? Will 20 times as many homes be
sold? I rest my case with these
rhetorical questions.
With few exceptions, the median household income statistic is the
one that retailers and homebuilders rely on.
Any broker, owner, or consultant who provides unsolicited data on “average
household income” in a property’s area is trying to mislead someone.
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