Why is the yield strength calculated on the basis of 0.2% or 0.5% strain only?

Which is preferred and why ?

1) To add on to the above answers, certainly the yield stress measured by 0.2% offset strain method is
"arbitrary" (answered by Prof. Germn Prieto/Prof. Pavel N. Yakushev ).
While determining yield stress using tension test, to avoid dynamic effects, the rate of load application has
to be slow (as answered by Prof. Tarik mer Ourtani) such that it is quasi-static. But the rate of loading
may vary with different materials. Further, this offset strain of 0.2% for yield stress is by ASTM, whereas in
England, 0.1% and 0.5 % is commonly used. Essentially 0.2% offset method of yield stress gives
reproducible values though it is an approximate measure (and accepted in engineering sense) of the
transition form elastic to onset of plastic deformation. But for metals and alloys (e.g. mild steel) that display
distinct yield point phenomenon (i.e., upper yield stress, lower yield stress and yield point elongation) due
to dislocation -solute interactions, generally it is preferred to take the lower yield stress value, as this value
is less sensitive to dynamic effects and is also conservative. (for YS: please see the link if you have
access: http://www.mts.com/university/Tension_Test.pdf)

How can I determine the 0.2% yield stress

from my stress-strain graphs?
I plotted my stress - strain data with excel. Now I need to get the 0.2% (strain) offset in order to get my yield
stress.
Since you have your data plotted in Excel, try the following technique:
1. Examine data to ensure you have a linear elastic region
2. Use the INDEX and LINEST function to calculate the slope (modulus) between 500 and 2500 microstrain
=INDEX(LINEST(stress range, strain range),1)
3. Use the INDEX and LINEST function to calculate the intercept between 500 and 2500 microstrain
=INDEX(LINEST(stress range, strain range),2)
4. Use these values to calculate an offset stress for each strain data point =modulus (from step 2) * (strain-
0.002) + intercept (from step 3)
5. Subtract measured stress from calculated offset stress
6. When this value equals zero you have your 0.2% offset yield stress.
To automatically determine this value use =INDEX(measured stress column, MATCH(TRUE,INDEX(stress
difference column from step 5<0,0,1),0))