Economics Asked by Seamus Lam on August 10, 2020
I need to compare change in employment size for a sample of companies. I could use percentage change, however, the problem with it is that when the base is small, a small absolute change result in a large percentage change.
For instance, company A and B employment is 10 and 10,000 respectively. assuming both company increase their employment by 5. the percentage increase is 50% for A and 0.05% for B.
I recall reading somewhere that there are some measures that take into account the different initial value when measuring changes (e.g., multiplying relative change by a function of absolute change). However, I can’t recall where I read it or the name of the indicator.
Anyone is aware of such indicator or is able to propose a solution?
TIA
https://en.wikipedia.org/wiki/Relative_change_and_difference
Törnqvist, Leo; Vartia, Pentti; Vartia, Yrjö (1985), "How Should Relative Changes Be Measured?", The American Statistician, 39 (1): 43–46, doi:10.2307/2683905
Answered by T.S. Lim on August 10, 2020
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