The arithmetic average of the total money income of all households in a specific geographic area, calculated by summing all household incomes and dividing by the total number of households.
While more susceptible to being skewed by very high or very low incomes, mean income represents the total economic activity divided among households. It can indicate the overall wealth generated or concentrated in an area, even if not evenly distributed.
Specific Relevance for Professionals:
Marketers
Useful when targeting high-net-worth individuals or when understanding the total potential spending power in an area, even if that wealth is concentrated in fewer households. It can provide a complementary perspective to median income, especially for luxury goods or services.
Researchers
Used in conjunction with median income to understand the shape of income distribution. A significant difference between the mean and median can signal income inequality, prompting a deeper investigation into wealth concentration or disparities within a population.
Consultants
Employed when assessing the aggregate purchasing power or total economic output of a region. It can help clients understand the full economic scale of a market, which might be relevant for large-scale investment or specialized high-end services.
Public Policy Workers
Provides another metric for economic analysis. While median income focuses on the typical household, mean income contributes to understanding the total economic resources within a community, informing tax policies or overall economic development strategies.