A Note on Utilizing the Geometric Mean: When, Why and How the Forensic Economist Should Employ the Geometric Mean

Forensic Economists often utilize the arithmetic average for calculating growth rates to estimate economic damages. While it may be convenient to calculate the arithmetic average, it is mathematically inaccurate when such a rate is compounded. In such cases, it is incumbent upon the Forensic Economist to employ the geometric mean. In this note, we outline the when, why and how to employ the accurate use of the geometric mean.