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index numbera 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.