1607-Price Indexing Flashcards
What are the Type of Price Indices?
SIMPLE
Simple index numbers calculate price changes for a single item over time
AGGREGATE
Aggregate index numbers calculate price changes for a group of related items over time
Normal (Bell Curve)
(mean = median)
What does a Bi-Modal shape tell us?
More analysis is needed
What does a left skewed tail tell us?
The mean is less than the median
What does a right skewed tail tell us?
The mean is more than the median
What does the bell curve tell us (normal)?
The mean equals the median
Skew
(mean ≠ median)
Right Skew
(tail to the right, mean ˃ median)
Left Skew
(tail to the left, mean < median)
What is the mean?
Arithmetic average
The mean is calculated by adding all the numbers together and dividing by the number of values
What is the median?
Middle Value
The median is the middle value of the numbers listed in rank order.
If there is an even number of values, the median is the mean of the middle two numbers
What is the mode?
The number in the data set that is represented most often
What is the Price Index Formula?
New Index ÷ Old Index X 100-100
NI/OI x 100 - 100
What is the Price Adjustment Formula?
New Index ÷ Old Index X Old Price = New Price
NI/OI x OP = NP
