We all live in Lake Wobegon

On the radio the other day a psychologist mentioned that 85% of people believe they are above average in intelligence.  Even if you haven’t taken statistics, you know that something’s not quite right with that number.  Unless, of course, you live in Lake Wobegon where:

all the women are strong, all the men are good-looking, and all the children are above average.

Garrison Keillor

This is called the Lake Wobegon effect.  For example, 88% of American college students rated themselves as above the median on driving skills and 25% put themselves in the top 1% for leadership ability.  Of course, apparently at the University of Nebraska, 68% of the faculty rated themselves in the top 25% for teaching ability.  For more examples look here. People, the numbers don’t lie!

    Why Lehman Brothers's CEO was payed hundreds of millions while losing billions of dollars

Why Lehman Brothers's CEO was payed hundreds of millions while losing billions of dollars

Besides being amusing, this effect can have real world consequences.  For example, it is blamed as part of the cause for the ever rising pay of CEO’s (If every CEO is above average, then they should be getting paid more than everyone else), and politician’s uncanny ability to get themselves and the country into trouble (if all the people in Congress are smarter than average, why do they keep doing dumb things?).

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