The appropriate average for calculating average percentage increase in...
When calculating the average percentage increase, it is important to consider the compounding nature of the changes. The geometric mean is well-suited for this purpose because it captures the growth rate over multiple periods.
The geometric mean is calculated by taking the nth root of the product of n values. In the context of calculating the average percentage increase in population, we would take the geometric mean of the growth rates observed over a specific period.
For example, let's consider a population that experienced the following percentage changes over five years: +10%, +5%, -3%, +8%, and +12%. To calculate the average percentage increase over these five years, we would take the geometric mean of these growth rates.
Using the arithmetic mean would not be appropriate in this case because it does not account for the compounding effect of the growth rates. The arithmetic mean would treat each growth rate equally, regardless of the compounding nature.
The geometric mean, on the other hand, considers the relative changes in the population size and provides an average growth rate that reflects the compounding effect over time. It is particularly useful when analyzing growth rates, financial returns, or any situation involving multiplicative changes.
In summary, the appropriate average for calculating the average percentage increase in population is the geometric mean.