Publication Date



Technical Report: UTEP-CS-14-39a

Published in: Van-Nam Huynh, Vladik Kreinovich, Songsak Sriboonchitta, and Komsan Suriya (eds.), Econometrics of Risk, Springer Verlag, Berlin, Heidelberg, 2015, pp. 63-73.


How can we compare the incomes of two different countries or regions? At first glance, it is sufficient to compare the mean incomes, but this is known to be not a very adequate comparison: according to this criterion, a very poor country with a few super-rich people may appear to be in good economic shape. A more adequate description of economy is the median income. However, the median is also not always fully adequate: e.g., raising the income of very poor people clearly improves the overall economy but does not change the median. In this paper, we use known techniques from group decision making -- namely, Nash's bargaining solution -- to come up with the most adequate measure of "average" income: geometric mean. On several examples, we illustrate how this measure works.

tr14-39.pdf (86 kB)
Original file

Included in

Econometrics Commons