The Devil Is In the Deltas

Those dastardly deltasThey say change is the only constant, and they may be right—whoever they are, but that's another matter. Sometimes the hard part is measuring that change, especially where there's disagreement over the methods used to quantify it. Although the mathematical procedures used for this purpose are well established, not everyone is familiar with them, and this is where the trouble begins.

The Greek uppercase letter, delta, is often used to denote change. In fact, it isn't uncommon to hear people involved in certain disciplines refer to changes simply as "deltas," or use the written equivalent in a similar way. To some, that little triangle is as familiar as the percent symbol, which brings us to the heart of the matter, namely, the combination of those two symbols. Together they signify a calculation that results in percent change—or Δ% if your browser is set up to display the character I have in mind—which often yields numbers that seem impossibly large, as percentages go.

For example, my Calculated Madness monologue repeatedly referred to a 6% rate of price-inflation for certain products over the years, but that isn't the same as percent change. The circa-1970, 35-cent gallon of gas I compared to the more recent $3.02 per gallon represents a 763% increase. That happens to be almost exactly the same delta as the 1970 median household income of $8,734 bounced against today's calculated equivalent of $75,428, which isn't completely surprising considering the 37-year interval in both cases.

Not to cause undue pain and anxiety, but you'll recall that the price of a gallon of gas was around $2.00 just after 2007 got under way, but shot up to over $3.00 only a few months later. Sure, it's come down a bit lately, but you're probably still paying somewhere around $2.80, give or take. Anyway, if we use $2.00 and $3.00 as our reference points—just to (1) keep things simple, and (2) blow your mind—we discover that this represents a 50% increase.

The question of how many gallons of gas were sold during that interval I'll leave to you to ponder, as well as the related questions concerning 50% profit increases and what they might represent in actual dollars, even over a period of months.

 

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