Initial Publication Date: March 25, 2015

What should the student get out of this module?

After completing this module, a student should be able to:

  • Differentiate between a change and a percentage change
  • Recognize when to use percentage change in the context of economic measures.
  • Calculate the percentage change for a variety of economic measures.
  • Distinguish between percent as a ratio and percent as an expression of a change in the context of economic measures.

What we don't include on this page

This module does not address the calculation of the average percentage change (midpoint) formula that is sometimes used when calculating elasticities. This alternative formula is addressed within the elasticity module itself.

Why is it difficult for students?

Calculating economic measures that rely on percentage change is difficult for students for two reasons.

  1. Many students are unfamiliar with --- or have forgotten --- the basic formula for calculating a percentage change.
  2. Students who may already be comfortable with the basic notion of a percentage change often get lost in the jargon of economics and the many acronyms and symbols used. Students often treat each concept --- e.g., GDP growth, CPI based inflation, elasticity --- as an entirely new concept, failing to make the connection that each involves the use of an identical percentage change calculation.

Instructor Resources


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