Misleading Through Percentages
Recently, I came across this article from Amazon : Amazon announces its largest reduction in plastic packaging in North America to date that reads
Amazon has replaced 95% of the plastic air pillows from delivery packaging in North America with paper filler, working toward full removal by the end of the year.
That's good right?
It means that if, say, they were previously using plastic air pillows for 98% of their total deliveries, then now they are only using them for 3% of the total deliveries.
That does sounds good!
In fact, too good!
Suspiciously good.
Now, I don't claim they are lying in any way, shape or form. But on a completely separate note, I want to tell about percentage differences. There are essentially 2 types of ways you can express a change in terms of percentages.
Let's talk about them in detail
1. Absolute Percentage Change
This is what people usually assume when you tell them something changed by some percentage. For example, if unemployment rate in US was 6% in 2022 and 8% in 2023, then we'd say that unemployment rates increased by 2%.
2. Relative Percentage Change
Now this is the tricky one. The culprit in most of the controversial news stories. Relative Percentage Change is the proportion of the change compared to the original value.
领英推荐
Expressed with the formula :
% change = ((new_value - old_value)/old_value) * 100
So if a company noted an increase in their employee satisfaction from 6% to 9%, then while the absolute change is of 3%, the relative change would be
((9-6)/6)*100 = 50%
Which means, they now get to report an increase of employee satisfaction by 50%.
And while this is also technically true, we fail to see the big picture here, because an overwhelming majority of their staff are still unsatisfied.
I'm still not saying that relative percentages are "evil". Both of them have their own use cases. While Absolute Changes are easier to understand, Relative change is better for understanding the impact or significance of the change. It means whatever change they did to increase their employee satisfaction did actually work, and it worked pretty well. But more often than not, organizations use this to exaggerate the change, because when people read that something increased/decreased by some percentage, they automatically assume Absolute Differences.
And now back to the original question, is it good news?
Undoubtedly, YES
But we don't know the real change. Did they go from using plastic pillows in 98% of their deliveries to just 3%? Or maybe they were only using plastic air pillows for 20% of their total deliveries, and now they're only using it for 1% of deliveries?
Without actual numbers, we can't tell.