In one room you have Mark Zuckerberg and Bill Gates.
In the next room you have a million random Americans.
The average income in room 1 is $100,000,000.
The average income in room 2 is $30,000
What’s the average income of everyone in both rooms together?
$100,000,000 + $30,000 = $100,030,000. Well, THAT doesn’t help, that’s just one average ADDED to another average, ending up with a number that is larger than either one, and not the average of anything.
($100,000,000 + $30,000) / 2 is $50,015,000. That’s more interesting. If for each room you say “ok, I’m going to take the average-income-of-occupants, and call that the AIO… so we have one room with an AIO of 100,000,000 and one room with an AIO of 30,000. So, what’s the average AIO across all rooms?”, it’s $50,015,000. That’s what you get when you take two averages, add them together, and divide by two. The average of the averages.
But what you MOST likely want is the average income of everyone in both rooms.
So the two averages are:
(1) (gates + zuckerberg) / 2
(2) (guy1 + guy2 + … + guy1000000) / 1000000
And the TOTAL average is:
(gates + zuckerberg + guy1 + guy2 + … + guy1000000) / 1000002
And that is neither of the previous numbers we’ve calculated. Instead it’s somewhere around $30200, if I did my math right.
Not sure if that helps or not 