The Flaw of Averages

Abstract

The measure of central tendency that Gould refers to is typically the average, also known as the expected value, and the mistakes he warns of result from a common fallacy as fundamental as the belief that the Earth is flat. It permeates planning activities in business, government and the military. It helped mask the recent subprime mortgage fiasco until it became a world crisis, and it will plague those trying to clean up the mess. It's even enshrined within accounting codes.