4.2.1.3 - index numbers Flashcards
1
Q
How to calculate index number with a base year
A
( new year / base year ) x 100
2
Q
Calculate index number with no base year
A
( current year raw value / previous year raw value ) x previous year index value
3
Q
What is an index number
A
A number used to show the size of changes in a variable overtime - it simplifies complex data into statistics that can easily be analysed
4
Q
What is a weighted index number
A
An average index, made up of a combination of other indices
5
Q
Why are index numbers useful
A
- Comparisons can be made over periods of time
- the size of a change is highlighted, allowing for easy interpretation.
( used when the actual values aren’t as important as the magnitude of change
6
Q
How to calculate a weighted index
A
Price index x weight ( sum of all price indices) / sum of weights
