LL Question -Median Balance Figure?

Can someone at LL comment on what the Median Balance figure means, as referred to below?

Anyone else know?


The Second Life Herald has in an editorial opposing the new LL economic changes. In their editorial, they sate

"The money supply has more than doubled in the last six months; that’s
a problem. But the Median Balance figure (a figure not explained in
the Linden spreadsheet) has actually fallen slightly. Land prices are
up, but not steeply. The biggest rises have been in gifts, payments
(which have almost tripled) and object sales."


What does the Median Balance measure? An economic indicator of what?


Read Editorial Here


SL Linden Forums & Data



Thanks


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Merwan, I have always thought that the median balance represented the median amount of money in the accounts of all avatars in SL. (You can find it on the "Transactions" tab in the Excel spreadsheet that Philip regularly posts.)

That makes sense Beryl.

Am wondering if in fact that's what it's referring to?

A 'median value' is the value that defines the half-way point between parts of the population. In this case, it would be the amount of L$ that divides the population in half: half of the population has more than this amount, and half of the population has less than this amount.

This differs from an 'average value', which is simply the sum total amount of L$ divided by the total population.

If you line up everyone's balance figures in a line, and take the exact middle one, that's the median balance.

So... in a group of seven people:

L$500 L$500 L$500 L$2,000 L$2,000 L$5,000 L$20,000

the median would be L$2,000.

This is different from the mean, which would be the outright average (add it all up and divide by 7) or the mode (the one which appears most often, which would be L$500).

Philip just commented that the median ratings bonus is L$75. So effectively, all this drama is over L$37.5/week

-Adam

LOL!!!!! Thanks for that Adam. Kinda puts it all in perspective, eh?

Probably most importantly, the median is more robust than the mean in the presence of outliers. Huh? If I have 5 people with balances of 4, 4, 4, 4, 1000 then the arithmetic mean is (1000 + 4 + 4 + 4 + 4) / 5 or 203.2 whereas the median - as described above - is 4.

In other words, the median is more representative of the "middle" balance than the mean. In a population like SL where most players might have a few thousand, a player with a million can distort the mean so that is not very representative of the population. Also, in a large enough population, the median is often close to the mode, the most frequently occuring value. So the median is the best way to describe with one number what people have in their wallets because some players (like the L$ brokers) have huge balances which really distort the mean.

I'd talk about skewness and kurtosis except I think you have already fallen asleep

WoW!


Thanks for that Adam!

Thanks everyone!

It was the "...balance..." word that had me confused.