Means and medians

Here is an article from the Wall Street Journal about the housing market in Detroit. Here's how the story starts:

On a grassy lot on a quiet block on a graceful boulevard stands the answer to a perplexing question: Why does the typical house in Detroit sell for $7,100?

The brick-and-stucco home at 1626 W. Boston Blvd. has watched almost a century of Detroit's ups and downs, through industrial brilliance and racial discord, economic decline and financial collapse. Its owners have played a part in it all. There was the engineer whose innovation elevated auto makers into kings; the teacher who watched fellow whites flee to the suburbs; the black plumber who broke the color barrier; the cop driven out by crime.

The last individual owner was a subprime borrower, who lost the house when investors foreclosed.

Then the article sites some statistics:

And the median selling price for a home stood at a paltry $7,100 as of July, according to First American CoreLogic Inc., a real-estate research firm -- down from $73,000 three years earlier. A typical house in Cleveland sells for $65,000. One in St. Louis goes for $120,000.

Now I understand that median house prices are the standard way of talking about what is "typical." Using the mean creates problems when most houses are of one value, but there are some outlier, high-priced houses.

But in this article, is median misleading in a different way? Did the house on Boston Blvd sell for $7,100? How many houses were sold in Detroit? Voluntarily? Can the dynamics associated with foreclosures make the median a poor choice to report?

Often we try to summarize with a few statistics, and that can be useful. But here I think there is need for more information to really understand this situation. The reporter probably had access to that data, if they wanted to report it.

Decision making when you know you will be second guessed

I teach quite a bit about structuring problems to help make decisions. Usually models can help illuminate the tradeoffs, and sometimes it becomes much more clear what the right strategy is.

But sometimes the downside of the "right" decision comes to dominate the thinking of the decision maker. This is a fundamental part of the dilemma facing the contestant on the game show Let's Make a Deal when they are offered the chance to change their original decision. Even if they are better off changing, the emotional pain of changing and then losing makes them stay with their first choice. They can hear their friends saying "You won the car and then you gave it away."

Here's an interesting article about football coaches going for it on fourth down. I am not sure about all the details of the study, but it is probably true that the thought of what the sports writers and talk radio people will say play an important part of the calculations of when to try or punt.