INDEX NUMBER

INDEX •An index number is a statistical device

for measuring changes in the magnitude
NUMBER of a group of related variables.
 • Index numbers are expressed in terms of
percentages. However, percentage sign (%) is never
used.
• Index numbers are relative measurement of group
of data.
FEATURES • Index numbers offer a precise measurement of the
quantitative change in the concerned variables over
OF INDEX time.

NUMBER • Index number show changes in terms of averages.

• They are expressed in numbers.
• Index number facilitates the comparative study
over different time period.
 • It serves as a barometer for measuring
the value of money.
IMPORTAN • Gives knowledge about change in
CE OF standard of living.

INDEX • It helps the business community in

planning their decision.
NUMBER • Helpful to determine the rate of
premium
 (i) Wholesale price index (WPI)
TYPES OF (ii) Consumer price index (CPI) or Cost of
living index
INDEX (iii) Index of industrial production (IIP)
(iv) Index of Agricultural production (IAP)
NUMBER (v) Sensex
 1. Construction of Simple Index
numbers:
a. Simple Aggregative Method
METHODS OF b. Simple Average of Price Relatives
CONSTRUCTING Method
INDEX 2. Construction of weighted Index
NUMBERS numbers:
a. weighted Average of Price Relative
Method
b. Weighted Aggregative Method