Hello everyone!
I hope you're doing fine.
I have the following picture. I would like to analyse by how much did the consumer spending on bread and cereal products decreased?. Which of this two approaches ir right:
1. It decreased 1.8% = 14.6% - 16.4%
or
2. It decreased 10.9% = (14.6% - 16.4%)/16.4%
Thank you very much.
Hi Floyd,
Henning is absolutely right here. We cannot say for certainty unless we know the absolute spend.
The % of total spend decreased by 10.9%...and it also decreased by 1.8 percentage points.
If you'd like more practice reading charts, I'd highly recommend you start reading the Economist daily. In particular, their graphic detail section is fantastic.
https://www.economist.com/graphic-detail
None of the above. Without knowing the total spend, the spend on bread & cerial could also have increased for all that you know.
If you're asking by how much the share of total consumer food spending spend for bread & cerials has changed, then: it decreased by 1.8ppts (percentage points) or 10.9%. Although the first one is (by far) the preferrable way of communication. Percent of percent (10.9% of 16.4%) is a very unintuitive metric.
