TransWikia.com

Comparing relative change for different base value

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

One Answer

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

Add your own answers!

Ask a Question

Get help from others!

© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP