Why do we use averages? Are there any limitations to their use? Illustrate with your own examples related to development.

Averages serve as useful tools for summarizing data and making comparisons. However, they come with limitations. While averages provide a quick snapshot, they shouldn’t be the sole metric for decision-making. Exploring full data distributions reveals the complete scenario. There limitations are:

1. Averages don’t reveal how data is distributed among individuals.
2. Extreme values (high or low) disproportionately impact averages.

For example, high per capita income of a state can be due to a few rich people while the majority of population can be deprived and poor. Therefore, an average value cannot always give an exact picture of the situation.