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canyonwalkerToday I read about an interesting tweet that went viral last week about MBA students overestimating what the average US worker earns:
Nina Strohminger is a professor at Wharton, the MBA program of the University of Pennsylvania. Wharton is currently rated as the #2 business school in the US.
My $65k answer comes from thinking about median household income— a better measure than individual income for purposes of many economic policy discussions. I recall looking up the $65k figure when I was writing about US socioeconomics a few years ago, so that's why it was my immediate answer here. On that metric I was actually very close. According to the US Census (2020) it was $67,521 in 2020. It was higher in 2019, at $69,560. Likely it was $65,000 a few years ago.
I asked Wharton students what they thought the average American worker makes per year and 25% of them thought it was over six figures. One of them thought it was $800k. Really not sure what to make of this (The real number is $45k)
— Nina Strohminger (@NinaStrohminger) January 20, 2022
Nina Strohminger is a professor at Wharton, the MBA program of the University of Pennsylvania. Wharton is currently rated as the #2 business school in the US.
"Lies, Damn Lies, and Statistics"
Most of the viral discussion about this tweet has been about how out of touch the MBA students are and why that's actually common— not just for people who tend to come from affluent families but everyone. My immediate thoughts were along those lines, too. But then I realized that before we even get to debating why this is, we need to look at the problems with the statistics. Professor Strohminger has actually done a poor job here. Five Things:- Okay, so one-quarter of the students think the number is $100,000+. What about the other 75%? What threshold fits the lowest one-quarter of answers? What was the average?
- How many students were surveyed? Small sample sizes yield meaningless results.
- What efforts were taken to ensure the students participating are representative of the class? (Since so much of the viral discussion is about characterizing Wharton students, or MBA students in general, or academic elites in general.) And were they taking it seriously? The person who answered $800,000 was likely ridiculing the question. How many others might have done the same?
- Did you specify median or mean? These figures are very different.
- The "correct" answer is also different depending on not just median vs. mean but also full-time vs. part-time work. Many policy experts would argue a better metric is median household income.
Am I Smarter than a Wharton Student?
FWIW my quick answer was $65,000. That's not correct for the exact question the professor asked. Though even her answer seems incorrect. The Social Security Administration reports that last year the mean US wage was $53,383 and the median was $34,612.My $65k answer comes from thinking about median household income— a better measure than individual income for purposes of many economic policy discussions. I recall looking up the $65k figure when I was writing about US socioeconomics a few years ago, so that's why it was my immediate answer here. On that metric I was actually very close. According to the US Census (2020) it was $67,521 in 2020. It was higher in 2019, at $69,560. Likely it was $65,000 a few years ago.
