Maverages, Price Index

The maverage is a statistic invented by this researcher to supplant the median and supplement the average. The traditional way of evaluating groups of sales foals is to use both averages and medians. That has a number of difficulties, the main one being what do you do with the two numbers once you have derived them? You can combine the two numbers somehow, but not in any statistically satisfactory manner. It is better to use only one number to try to correlate sales prices with results.

Here is how the maverage is calculated. For prices up to $10,000, simply divide by 100. Ergo, $1,000 = 10, $2,000 = 20, etc. For prices between $10,000 and $1,000,000, take the square root. Ergo, $10,000 = 100, $40,000 = 200, $90,000 = 300, etc.

The square root of $1,000,000 is 1,000. The square root of $4,000,000 is 2,000. It was decided to minimize prices above $1,000,000 even further. Prices above $1,000,000 are more about human egos than the actual value of any given animal. Was The Green Monkey really worth $16,000,000? The prosecution rests. Ergo, it was decided that $1,000,000 = 1,000, $2,000,000 = 1,100, $3,000,000 = 1,200, $4,000,000 = 1,300 (not the 2,000 square root), etc.

The maverage rationalizes prices so that they can be utilized as averages without the distortion of the highest prices.  It is calculated like an average (just sum up and divide) but behaves somewhat more like a median. The Price Index is simply the maverage divided by the overall maverage for the entire group (150 on the nose for sales foals of 1999-2002; 163.11 for sales foals of 2003-2007).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s