How can we interpret the difference between two

Lesnaoq73

Lesnaoq73

Answered question

2022-03-26

How can we interpret the difference between two log points? Is it correct to interpret this difference in percentage points?

Answer & Explanation

Matronola3zw6

Matronola3zw6

Beginner2022-03-27Added 10 answers

Just to elaborate some on what Spencer wrote:
log(x)log(y)=log(xy)=log(xyy+1)=log(%100+1)
where % is the percentage change. A first order Taylor approximation around %=0 gives
log(x)log(y)=log(%100+1)%100
The exact percentage change is of course given by
100(elog(x)log(y)1)

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