Page 221 - DECO504_STATISTICAL_METHODS_IN_ECONOMICS_ENGLISH

Unit 15 : Index Number–Introduction and Use of Index Numbers and their Types

15.5 Key-Words Notes

1. Index Number : In economics and finance, an index is a statistical measure of changes in a
representative group of individual data points. These data may be derived
from any number of sources, including company performance, prices,
productivity, and employment. Economic indices (index, plural) track
economic health from different perspectives. Influential global financial
indices such as the Global Dow, and the NASDAQ Composite track the
performance of selected large and powerful companies in order to evaluate
and predict economic trends.
15.6 Review Questions

1. What are index numbers ? How are they constructed ?
2. Define index numbers. Analyse the use of index numbers.
3. What are the various problems faced in construction of index numbers ?
4. “Index numbers are devices for measuring differences in the magnitude of a group of related
variables”. Discuss this statement and point out the use of index numbers.
5. What are the various types of index numbers.
Answers: Self-Assessment
1. (i) Specialised (ii) 1764
(iii) Geometric mean (iv) Changes (v) Barometers
15.7 Further Readings

1. Elementary Statistical Methods; SP. Gupta, Sultan Chand & Sons,
New Delhi - 110002.
2. Statistical Methods — An Introductory Text; Jyoti Prasad Medhi, New Age
International Publishers, New Delhi - 110002.
3. Statistics; E. Narayanan Nadar, PHI Learning Private Limied, New Delhi - 110012.
4. Quantitative Methods—Theory and Applications; J.K. Sharma, Macmillan
Publishers India Ltd., New Delhi - 110002.

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