Average of the log is more principled and I’m pretty surprised that givewell did it the reverse. These two quantities are always different (Jensen’s inequality) and only one of them is what we care about. Log increase in consumption/income represents the % increase in that quantity. We want to find the average % increase across all people, so we should take the average of the log increase.
Average of the log is more principled and I’m pretty surprised that givewell did it the reverse. These two quantities are always different (Jensen’s inequality) and only one of them is what we care about. Log increase in consumption/income represents the % increase in that quantity. We want to find the average % increase across all people, so we should take the average of the log increase.