Question

why might we have seen such a large divergence in the median and mean incomes in the 2010 to 2013 period, with one increasing and the other decreasing? figure 1. change in median and mean family incomes, 2010 - 16 surveys inflation caused the working class to have less disposable income than high - income earners. while most people saw their income decrease, a small number of very high - income earners saw their income increase. tax increases hit the wealthy harder during this time period than they did the middle class. income inequality narrowed during this time period, with people in the middle of the income distribution doing better than people at the extremes.

Explanation:

The median is the middle - value in a data set, and the mean is the average. If most people's incomes decrease (pulling the median down) but a small number of very high - income earners see their incomes increase (pulling the mean up), this can cause the divergence. Inflation affecting working - class more than high - income earners would affect the median (since the working - class is a large part of the middle of the income distribution) but not as much the mean (if high - income earners are less affected). Tax increases on the wealthy would affect the mean (as the wealthy contribute more to the total income sum for the mean calculation) but not as much the median. Income inequality narrowing would make the median and mean move in the same direction.

Answer:

While most people saw their income decrease, a small number of very high - income earners saw their income increase.