MEG and EEG studies of event-related responses often involve comparisons of grand averages, requiring homogeneity of the variances. Here, we examine the possibility, implied by the nature of neural sources and the measuring principles involved, that the M100 component of auditory-evoked magnetic fields of different subjects, hemispheres, to different stimuli, and at different sensors differs by scaling factors. Such a multiplicative model predicts a linear increase in the standard deviation with the mean, and thus would have important implications for averaging and comparing such data. Our analyses, at the sensor and the source level, clearly show that the multiplicative model applies. We therefore propose geometric, rather than arithmetic, averaging of the M100 component across subjects and suggest a novel and superior normalization procedure. Our results question the justification of the common practice of subtracting arithmetic grand averages.