File talk:Gold-nominal-constant-usd.svg

Why non-linear scale? From en:User_talk:Codehydro#gold_price_chart

Hi there, I see you're a much more prolific contributor than I but I happen to be viewing the wiki on gold when I noticed a historical price chart that, at first glance, appeared to be very different from what my memory of gold prices told me. After viewing I noticed the scale was exponential rather than linear which struck me as unusual and perhaps less helpful to the average viewer, and also could present gold as a much more stable investment compared to actual values given the smoothness of the scale. For reference, the chart on the gold wiki and a typical 100 year chart (both inflation adjusted) I'm not trying to claim you have done anything improper, but I am curious as to why the scale is exponential rather than linear since price scales are typically linear, could you fill me in on what i'm missing here? thanks for your time. — Preceding unsigned comment added by Tunafizzle (talk • contribs) 01:09, 27 September 2014 (UTC)

• @Tunafizzle: Glad you asked! To answer, notice how your example plots only adjusted prices whereas my chart also plots nominal (non-adjusted) prices in addition to the above. Though fine for plotting inflation-adjusted prices, a linear scale would be inappropriate for plotting nominal prices over any duration long enough for significant inflation. For example, given the thumbnail size of the chart as shown on Gold#Investment, it would take a change of ~$18 to shift the line by a single pixel on a linear scale. Thus, even though the increase of $14.33 meant a dramatic 68 percent change in 1934, a linear scale may show no increase at all. Secondly, though you are right that a linear scale can be easier to comprehend, a logarithmic scale is more useful for comparing relative change. For example, a hypothetical $50 price drop looks deceptively the same whether you started with $100 or $1000, even though the loss suffered by an investor would be 10 times bigger in the former (50% vs. 5%); in contrast, on a log scale, an investment gain of 10% looks just a sharp whether the initial price were $1 or $10000. Of course, an alternative could be to plot adjusted prices on a linear scale and nominal ones on a separate scale, however, I think having two scales could cause even greater confusion than what you experienced. Does this answer your question? —CodeHydro 19:55, 30 September 2014 (UTC)