I am comparing food inflation estimates from different sources for the same year and country. Food inflation can be negative or positive, e.g. year 2010: 5% in Source A and 7.5% in Source B; year 2011 1% in Source A and -2% in Source B.
I want to flag cases where inflation for the same country and year differ considerably between the two sources. I thought that I could flag cases where the absolute difference in inflation percentage points between the two sources is >2.
So, if source A has 5% and source B 1%, then this case would be flagged since |5%-1%|=4% is greater than 2%.
The choice that the absolute difference be greater than 2 percentage points of inflation is arbitrary. However, what am I missing by using a difference measure to assess differences between sources? Should I use a ratio measure instead, e.g. 5%/1%?