The tyranny of misleading averages - reprise

This is an updated version of an article first written in December 2007. The principles in the post are all still absolutely valid, but some of the detail was now out of date because but in the intervening period of nearly twenty years there has been local government reorganisation and some of the electoral boundaries referenced had changed.

As the principles are still as relevant as ever, I am posting a this new version of the post with updated examples and detail.

Anyone who wants to read the original version of the post can find it here.

A West country MP, Gerry Neale, used to tell the story that he was once making a speech to Cornish farmers and said that "on average, I do not think you are doing too badly."

"Look here, mister" replied one of the farmers, "Stand me with my left foot in a block of ice and my right foot in a bucket of boiling water and tell me on average I am all right and I'll tell you I'm not!"

I was reminded of this during a seminar on improving the economy of West Cumbria when one of the officers of Copeland Council referred to the area as having a high wage and high skill economy.

I pointed out to him that we had one industry employing about a quarter of the local working population, many of whom are highly skilled and many of whom, either because of those skills or because their work is at unsocial hours or hazardous, are remunerated at a level very different from that of the remainder of the work force in the area. And that in consequence the average wage statistics were almost meaningless. Almost everyone in that quarter of the work force were paid well above the mean wage for the area: but the average for the other three quarters would be much lower.

At the time of republishing this post, there is ongoing industrial action in West Cumbria and it is likely that both people who are taking part in that industrial action and other people affected by the action will read it.

I am not going to pour petrol on the flames of the strong feelings involved on both sides by wording my comments about the relative wages involved in a way which could appear to be taking a side in the current wage dispute. Not because I am afraid to express an opinion but because I don't want it to distract from the main point of this post, which is that averages covering a very diverse group can be highly misleading.  

It is not at all unusual for a group of people - the residents of a ward or constituency, the people who work in a broad field - to be divided into two or more sub-segments and for average statistics which describe the whole group to bear no relation to the circumstances of any given individual.

An example of an area where this can cause problems is with average statistics for measures of poverty. In both Cumbria and Hertfordshire I have seen policies to target disadvantaged areas based on average statistics for council wards. Unfortunately those averages may be very misleading where a council ward is large and diverse. 

For instance, all the areas I have had the privilege of being elected to represent, from Egremont North & St Bees which I represented on the former Cumbria County Council before it was abolished in 2023, and my previous wards of Bransty (on old boundaries) and Sandridge, were disadvantaged by this analysis.

One ward contained a relatively new estate, many of whose residents commuted into the City of London to work, and which substantially reduced the ward average figures for most measures of deprivation, but the rest of the ward contained substantial areas of poverty.

This issue really came home to bite the people of Whitehaven and surrounding areas during the debate about whether to approve a mine to extract metallurgical coal to use to make steel (NOT to burn in power stations.)

The mine would have been located, and provided hundreds of well-paying jobs, in close proximity to three of the most deprived communities in England, the Kells, Woodhouse and Mirehouse estates. This was repeatedly pointed out by those of us who supported the mine proposal as a far cleaner way to get coking coal for the British and European steel industries than importing it from Russia and America and shipping it a substantial proportion of the way round the world.

However, a number of foolish and ill-informed people, almost all of whom lived on the other side of Cumbria, the other side of the country, or in one case the other side of the North Sea, who knew nothing whatsoever about the community they were trying to deprive of much-needed jobs, kept challenging the argument that the mine was being proposed in a deprived area and arguing based on average data that the area is relatively affluent area.

This misunderstanding came about because Mirehouse, Woodhouse and Kells were part of three electoral divisions, one of them the Egremont North & St Bees division which I represented on Cumbria County Council at the time, which also included other areas of very different social and economic character. The electoral division averages were worse than meaningless, they were actively misleading. 

 

Overall the degree of poverty and need in the areas concerned were much greater than you would imagine from electoral division average statistics, and the debate over the mine is far from the only occasion this has had an impact on key decisions or the distribution of resources.

The lesson from this is that authorities should take care when planning their economic strategies to be aware of the fact that some average statistics may be very misleading. 

Apologies for a bit of basic statistical jargon, but this is still true whether the average that you use is an arithmetic mean (add all the figures and divide by the number of people) the median (put the numbers in order from the lowest to the highest and take the number half way down the list) or the mode (the most common result.)

And when distributing resources it is necessary to bear in mind that an area which on average is affluent may contain pockets of considerable poverty.