Calculating a percent change in something. Say population of an area between year 1 and 2. When year two is greater than year 1, simple enough:

Year 1: 2000

Year 2: 2500

(2500/2000) -1 = 25% increase.

But what if the difference between year 1 and 2 is negative?

Year 1: 2500

Year 2: 2000

. . Is it (2000/2500)-1 = -20%

.or is it (2500/2000)-1)/-1 = -25% (like the inverse of the increase of 25%)?

Giles
2
IMHO, it’s a 20% decrease, because it’s calculating from the starting point.

Population of 2 going to 1 is a 50% decrease, and not a 100% decrease.

It’s a 20% decrease. You always use the first figure (here 2500) as the base figure when calculating percentage changes.

LSLGuy
4
One of the key side effects here is that after taking a 20% pay cut, it takes a 25% pay raise to get back to the original rate.