Percentpoint

Percentpoint is a unit of measure used to express the difference between two percentages. It is calculated by subtracting one percentage value from another. For example, if a country's unemployment rate falls from 10% to 8%, this is a decrease of 2 percentage points. It is important to distinguish percentage points from percentage change. A percentage change expresses the relative change between two values. In the previous example, the percentage change in unemployment would be calculated as ((8% - 10%) / 10%) * 100%, which equals a 20% decrease. Therefore, a 2 percentage point decrease is equivalent to a 20% decrease in this scenario. Using percentage points avoids ambiguity when discussing changes in percentages, especially when the base percentage is small. For instance, if a company's market share increases from 1% to 2%, this is a 1 percentage point increase. However, this represents a 100% increase in market share, as the new share is double the original share. The term "percentage point" is commonly used in fields such as economics, finance, and statistics when reporting on changes in rates, shares, or proportions.