What You Will Learn!
- Index Number
- Introduction of Index number
- Meaning of Index Number
- Characteristics of Index Numbers
- Purpose, Importance and Uses of Index Numbers
- Limitation of Index Numbers
- Kinds of Index Numbers
- Methods of Constructing index Numbers
- Single Year Fixed Base Method
- Fixed Year Average Base Method
- Base conversion Method
- Weighted aggregative method
- Fisher’s Ideal index Number
- When price per unit or quantity is not given in question
- Reversibility Test
- Paasche’s index Number
- Laspeyre’s index Number
- Marshall – Edgeworth’s index Number
- Dorbish & Bowley’s index Number
- Family Budget or Weighted Average of Price Relatives Method
Description
Index number
Contents #
➢ Relation between two figures
➢ Measurement of changes / variation in market (economic factor)
➢ Measurement of changes in price, quantity, production,
➢ It is expressed in terms of %
➢ Meaningful information by index number
➢ Father of index number = Professor / famous Statistician CARLI in 1764 in Italy
Introduction of Index Number
Meaning of Index Number
Characteristics of Index Numbers :
1. Index numbers are specialized averages
2. Index numbers are expressed in percentages
3. Index numbers measure changes not capable of direct measurement
4. Index numbers are for comparison
Purpose, Importance and Uses of Index Numbers :
1. To measure and compare changes
2. To measure the purchasing power of money
3. Helpful in policy formation
4. Helpful in studying trends
5. Helpful in deflating various values
6. Act as Economic barometers
Limitation of Index Numbers:
1. Estimate measurement of relative changes
2. Lack of Accuracy
3. Difference in Purpose
4. Other Limitations
Kinds of Index Numbers :
1. Price Index
2. Quantity index
3. Value index
4. Special purpose index
Methods of Constructing index Numbers :
For a Single Variable/Item
Fixed Base Method :
1. Single Year Fixed Base Method
2. Fixed Year Average Base Method
Base conversion :
1. Conversion from fixed base to chain base
2. Conversion from chain base to fixed base
Weighted aggregative method :
Fisher’s Ideal index Number
Some Extra Names of Fisher’s Index Number
➢ Ideal Index Number
➢ Suitable Index Number
➢ Appropriate Index Number
When price per unit or quantity is not given in question
Reversibility Test
1. Time Reversal Test
2. Factor Reversal Test
Paasche’s index Number
Laspeyre’s index Number
Dorbish & Bowley’s index Number
Marshall – Edgeworth’s index Number
Family Budget or Weighted Average of Price Relatives Method
Some Important MCQ's for Revision.
Who Should Attend!
- Any Student who pursuing in B,com M,com BBA MBA 11th & 12th Commerce C.A. C.S. and C.M.A.
