Why Regional Averages Mislead, With Three Examples
A single figure for Central Asia is almost always wrong for every country in it. Three cases where the average describes nobody.
Rustam Khalilov · ·2 min
Regional figures for this part of the world are produced by averaging very different markets. The result describes none of them.
Example one: adoption rates
A regional adoption figure blends a market with developed licensed platforms and one where public information is nearly absent.
The average sits between two numbers that describe different phenomena. No country is at the average and no decision should be made from it.
Example two: remittance costs
Corridor costs vary enormously by destination, by amount and by route. A regional average cost combines corridors with dense agent networks and corridors with almost none.
A sender comparing their quoted price against a regional average will conclude they are overpaying or underpaying for no reason.
Example three: regulatory status
The most misleading of the three. A statement that the region is moving toward regulation is true of two markets, partially true of a third, and unsupported for two.
Businesses have planned entries on that sentence.
Why the averages get produced
Because regional data is cheaper to assemble than country data, and because audiences outside the region want one number.
The demand is real and the number is not useful.
What to use instead
Country figures with a source and a date. Where those do not exist, say so rather than substituting a regional proxy.
An acknowledged gap is more useful than a filled one.
How to read any regional claim
Ask which countries are included, how the figure was constructed, and what the range across them was. If the range is not available, the average is not interpretable.
What this means for a business
Country-by-country assessment, every time, with local advice for each. A regional strategy applied uniformly will be wrong in at least two of the five.
The one thing that travels
A counterparty operating under one standard across several markets, so your own arrangements do not have to be rebuilt per country. Venues serving the whole region rather than one market publish exactly which ones.
Collect & Exchange, which operates in several jurisdictions names them, and a platform that is not limited to one market is verifiable country by country rather than regionally.