Programming the statistical procedures from SAS

Growth rate

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Growth rate

Hello

 

I have an example and I am not sure how to handle with the data

 

FirmSalesYearChange
A1202007-8%
A1302006-7%
A1402005 
B15200625%
B12200520%
B102004 

 

Should I use Lines A-2005 and B-2004 in column "change" as 0 or missing data?

 

Thanks a lot!


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‎08-30-2016 12:22 AM
Respected Advisor
Posts: 4,606

Re: Growth rate

Either,

 

Change = (Sales(y) - Sales(y-1)) / Sales(y-1); 

 

if Sales(y-1) is unknown (missing) then Change should be missing.

if Sales(y-1) is zero (new product, new company) then change should be +Infinity

PG

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Grand Advisor
Posts: 10,026

Re: Growth rate

I would say it would depend on what your are going to do with that change variable later. If I wanted average change rate from year to year I would not want the value to be 0 as you would end up with an n of 3 and (0 + -7 + -8)/3 would notably different from the apparent -7.5% change average. (Noting that averaging percents is a dangerous activity in general).

But for some modely I may need a 0 as a baseline.

Solution
‎08-30-2016 12:22 AM
Respected Advisor
Posts: 4,606

Re: Growth rate

Either,

 

Change = (Sales(y) - Sales(y-1)) / Sales(y-1); 

 

if Sales(y-1) is unknown (missing) then Change should be missing.

if Sales(y-1) is zero (new product, new company) then change should be +Infinity

PG
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