Chapter 17

Index Numbers

And in such indexes…, there is seen the baby figure of the gaint mass of things to come.

—William Shakespeare

LEARNING OBJECTIVES

 

After studying this chapter, you should be able to

  • explain the purpose of index numbers.

  • compute indexes to measure price changes and quantity changes over time.

  • revise the base period of a series of index numbers

  • explain and derive link relatives

  • discuss the limitations of index number construction

17.1 INTRODUCTION

We know that most values change and therefore may want to know-how much change has taken place over a period of time. For example, we may want to know-how much the prices of different items essential to a household have increased or decreased so that necessary adjustments ...

Get Business Statistics, Second Edition now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial