Last month, I bought a pair of socks for $5.00. Last week, the store had a sale and dropped the price of the socks by 25%. This week, they raised the price by 25%, so now the same socks I bought last month are selling for $4.69.
We’ll get back to that in a minute.
A little context can make a big difference when it comes to understanding a change in percentage. Percent change is misleading more often than not — unless you know detailed counts for both the original number and the new number. So how do we know what’s really happening?
Looking at Context
Let’s look at this another way. Examining the average achievement score of three different schools, we find that each school experienced a 5-point increase:
- School A increased their score from 20 to 25
- School B went from 50 to 55
- School C rose from 95 to 100
All three schools experienced the exact same amount of change: 5 points. But because the context varies — each school is working to improve on its unique score — the percentage change is wildly different:
- School A improved by 25%
- School B went up by 10%
- School C saw only a 5% change
As you can see, when looking solely at percentages, the figures are difficult to interpret and have the potential to be extremely deceptive. Percent change can be misleading, particularly when the initial numbers are low.
Picturing Percent Change
Let’s get back to my sock purchase, shall we? It seems reasonable enough to assume that discounting something by 25% and then increasing the price by 25% should result in a final price that matches the original, but not so:
Looking at the charts, it’s much easier to see where the price increases and decreases got confusing. The original discount was 25% of $5.00, or $1.25. When the price was increased, it went up by 25% of $3.75, or $0.94 — the number the percentage was based on changed, and that’s where percentage change becomes misleading.
Percentage Change in Real World Trends
Another example of percentage change misleading the public can be found within the story of young Americans who can’t afford to move out on their own and are now stuck living with their folks. As in previous examples, if you want to know what is really happening in this trend, you need to see the larger context.
- In 1970, 12.5 million adult children (18-34 years old) lived with their parents.
- In 2015, research shows this number rose to over 18.6 million.
Looking at these two figures without context, you could draw the conclusion that the number of young adults living with their parents has increased by 48%.
But to fully understand this situation, more context is needed. In the last 45 years, the American population itself has also risen dramatically — by about 75 million people, or around 32%.
So in simpler figures, the number of 18- to 34-year-olds living with their parents has gone from a bit more than one in five to not quite one in four. Still an increase, but nothing like 48%.
What does this mean?
When examined in context, it appears the biggest factor (although not the only one) in the increased numbers of Americans living with their parents is… well, the increased numbers of Americans. Once again, without the actual numbers to provide necessary context, percent change is misleading.
Avoiding the Trap
When telling a story with data, consider using measures that are less likely to be misleading. For example:
- Percentage points. There was a slight increase in the percentage of young Americans living with their parents between 1970 and 2015. Expressed as percentage points (rather than percentage change), the difference is 0.68 percentage points, a number which much more clearly conveys the rate of increase.
- Absolute change. In the first example using the schools, the initial differences were conveyed with absolute change (School A went from 20 to 25, etc.), which removes any ambiguity about the difference in each school’s score.
If using percent change is absolutely unavoidable, be sure to include both the actual numbers and the percent change to provide context.
Accurate Data to Engage Your Audience
When telling your story with data, it’s critical to use figures that accurately convey the realities of what you do so you can educate and engage your audience. Using confusing or misleading numbers like percentage change puts you at risk of over- or underestimating your impact, and leaving your audience unsure of what you’ve accomplished.
At Datassist, our primary goal is to help nonprofits tell their stories in a meaningful, accurate, and compelling way. We use rigorous data collection and analysis together with beautiful visual representations of your numbers to make sure you win the hearts and minds of your partners, donors and participants. Get in touch today to discuss how we can help you.