index number

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Index number

A way to standardize the price changes of goods that have much different prices. For example, a consumer price index might be represented by a shopping cart of goods. Suppose those goods cost $324. The index would begin by dividing by 3.24 and the initial value would be 100. One usually watches the percentage increases or decreases in the index. See: Consumer Price Index (CPI), Time series models

Base Value

An often arbitrary figure used as the initial value of an index. All future values of the index are comparisons against the base value. For example, suppose an index is formed in 2001 and its base value is 100. If the index is 150 in 2009, it means that its value is 50% higher in 2009 than it was in 2001. It is also called the index number. See also: Base Year.

index number

a single numerical value that reflects the relative size of a VARIABLE in the period under review compared with its size in some predetermined BASE YEAR. For example, a RETAIL PRICE INDEX takes the same sample of goods and services in each period and measures the average price of this typical basket of goods and services, showing this average price in the form of a single index number.

The base period of an index is, by convention, given an index number of 100. For the UK Retail Price Index, this period is (currently) 1987, and subsequent percentage changes commence from that year. In 2004 the Retail Price Index was 187, suggesting that retail prices have increased by 87% on average between 1987 and 2004.

Regardless of whether the index is in terms of price, volume or value, the principle of index numbers remains the same: to exhibit simply and concisely the measured change in a variable from one period to another. See PRICE INDEX, INDEXATION, INDEX-LINKED.

References in periodicals archive ?
On the contrary, three of the main sections constituting the index for the cost of living have registered a decrease in their index numbers topped by the section of clothing and footwear by (0.
After typing the index number in the above format, send the SMS message to any of the following phone numbers: 51818, 56263, 58888, 5676750, 56388 and 54242.
The stochastic approach leads to familiar index number formulae such as Divisia and Laspeyres.
Splicing is necessary when no single index number spans, in its date range, the entire desired time interval.
The averages of air-dry densities go down slightly with changing site index number from I to III.
Years ago, Irving Fisher(1) of Yale University, and, more recently, Erwin Diewert(2) of the University of British Columbia and his coauthors, studied the criteria that a superlative index number should meet.
Managing a hospital on the basis of a single index number, the Hospital Performance Index, which is calculated annually, and on data that are more than two years old is one of the most challenging hurdles facing Alberta hospitals today.
Mazel also noted a fee could deter less affluent owners from filing a protest just as the index number fee often deters them from continuing with a meritorious case.
The main concept of an index number is to measure the general level of magnitude of group of distinct, but related variables in two or more situations.
In recent years there have been important advances in the application of index number theory to the financial firm.
Each Control Form is identified with a Control Form (Index) Number, and made reference to in respective procedure with index number and form title.
The seasonally-adjusted Purchasing Managers' Index for manufacturing, compiled by the Chartered Institute of Purchasing and Supply and the Royal Bank of Scotland, came in with an index number of 53.