Economics · Ch 7 — Index Numbers
Recap
Recap
- An index number is a statistical device for measuring the relative change in a large group of items between two periods, the base period being set at 100.
- Several formulae exist — simple and weighted aggregative methods and the method of averaging (price) relatives — and each must be interpreted carefully.
- The choice of formula depends chiefly on the question of interest; Laspeyre's and Paasche's indices differ only in whether base- or current-period quantities are used as weights. …