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Why do we use averages? Are there any limitations to their use? Illustrate with your own examples related to development
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Whenever we need to analyse a big amount, it is difficult to analyse individual data. Hence, it is important to use averages in such cases. Averages have some limitations. Average figure hides disparities. For example, let us consider two countries, A and B with bot having 5 citizens.
 
 
 
I
II
III
IV
V
Average
Country:A
9500
10500
9800
10000
10200
10000
Country:B
500
500
500
500
48000
10000
 
 
Even though both the countries have identical average income, country A is preferred because it has more equitable distribution. Hence, while average income is useful for comparison it does not tell us how this income is distributed among people.
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