An Index number is a data figure which shows the price or quantity in comparison with the base value. The base value is equals to 100 and it is expressed as 100 times the ratio of the base value.
Index numbers are generally a part of time series analysis where we analyze the trend of values in a group of related variables. Sometimes, Index numbers are also used to compare the geographic areas at a given point of time. Some example of this are Purchasing power parity, consumer price index , cost of living index and retails prices.
A price index is the averages of the prices for a given class of goods or service within a given interval of time.
These index numbers are generally used in seeing the trend and help in formulating the policies.
There are many statistician and mathematician who contributed to calculate the index numbers like Fisher, Laspreys etc.
No comments:
Post a Comment