I'm confused because you'd think that average household net worth would be a pretty simple thing to determine. Apparently not so. Two recent estimates are almost 3x apart:


Reported this week by Environics Analytics of Toronto is this: "The study says the average Canadian household had a net worth of $363,202 at the end of last year, versus $319,970 for the average American household."
But one year ago this week the Pew Research Center reported this: "In 2009, the median net worth of white households was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks.


How can estimates of American household net worth differ by a factor of three (or more if you factor in minority households)? Should we all simply not believe anything we read any longer, or am I missing critical contextual differentiators?

Probably differential disclosure or different ideas of what is included as "wealth".

At first glance, makes me wonder if one study includes home value and the other doesn't.

I would be very surprised if the "average American household" really has a net worth of $319,000.

At first glance I thought one may have been net income and the other net worth, but I see they are both the same...is there a difference between "average" and "median"???

...is there a difference between "average" and "median"???
This is sort of comparing apples to oranges. Median is just the halfway point between one end of an ordered number list and the other end. Average is the sum of the numbers divided by the number of numbers. As an illustration, consider this list of seven numbers.

1
10
10
15 <---Median
20
30
42

They total 128

The average is 18.28 (128/7)
The median is 15

BTW, if you have an even number of numbers, to get the median, you just add the two middle numbers and divide by two (average them).

1
10
10
15
17
20
30
42

Median is (17+15)/2 = 16
(Average of the list is 18.12)

At first glance, makes me wonder if one study includes home value and the other doesn't.

I would be very surprised if the "average American household" really has a net worth of $319,000.

Yeah i really wonder what they mean by 'wealth'. The numbers that have been posted could be more in line with household debt, rather than wealth. Sometimes people confuse themselves for being wealthy or rich after taking on a house with a 300,000 dollar mortgage for 30 years (and then have to pay out 2.5 times that amount over the life of the loan), when they only make 40k a year. Heck, we all saw how wealthy those California people were living in those million dollar homes were after the crash.

When watching those flipper shows or my next house shows on tv I always wondered how an administrative assistant and a bartender afforded a 750k mortgage. Then (obviously) it turned out they couldnt.

I think if the numbers are accurate, there really isn't much of a contradiction since one is the average and one is the medium. Housing is so incredibly variable, depending on where you live. The same $100,000.00 house in Oklahoma might be valued at three for four times that on parts of the east coast and even higher in California - our population centers tend to have much higher housing values and until the housing bubble hit, a lot of homes had equity that could be used for investments to grow wealth.

Additionally, while home ownership in Canada and in the United States, as of 2006, was roughly the same percentage of the population, not only are they drawing from a much smaller sample to find their medium, the poverty level in Canada is much lower than what we find here - maybe a third of what we count as living in poverty. They may be using different numbers but if someone in the United States is deemed under the poverty line, they are going to have a much harder time getting funding to purchase a home and other assets to grow. More likely, we simply have many, many more poor people living here than live in Canada, dragging down the stats. If you are going to be poor, it is probably better to live in the sunbelt where there is more manual labor more days of the year than to live in cold Canada where if you don't have wealth, education or land, you are really going to be in a bad way. And cold. Another reason could be our number of legal immigrants - we could easily expect they would have low net worth for quite a few years. We have many more legal immigrants than does Canada. That is not to say they are a restrictive immigration system, but they simply have a smaller country, population-wise to absorb the numbers we do.

We have millions of illegal immigrants and they are also going to draw down the net worth since so many either have little money or don't claim what they do. That being said, I am not sure they would count the illegals to put together these studies. Where I did see a connection was while I was working as a guardian ad litem in Virginia, I regularly saw young women having children with illegals and they usually ended up receiving public assistance and certainly didn't have two nickles to rub together, especially when the children started arriving. In pockets of high illegal immigration, that happens quite a bit.