Why do we use an average? Are there any limitations on their use? Illustrate with an example related to development.

The average is used to compare two or more quantities that belong to the same category. Generally, the average is used to compare development in different states or regions of a country.

Example:

To determine the economic development of a country, we use per capita income or average income. But this criterion has its own limitations which are as follows:

1. It does not reflect the standard of living of the people.

2. This criterion neglects other developmental resources like health and education.

3. While using this criterion, we cannot come to know disparities in the distribution of income. There is a wide gap between the income of rich and poor people.

4. It does not give information on non-materialistic goals and services like safety, security, equality, freedom and a clean environment.

5. This criterion gets influenced by large numbers.

Therefore, average alone cannot be used as a parameter to measure the economic development of a country.