Features of Index Numbers in Statistics –

Index Number has the following features in statistics:

(i) Index numbers are specialized averages that are capable of being expressed in percentages.

(ii) Index numbers measure the changes in the level of a given phenomenon.

(iii) Index numbers quantify the impact of changes made over time.

Importance of Index Numbers in Statistics –

For economic and business analysis, index numbers are a necessary tool. You can understand the importance of Index Numbers in statistics by considering the following points:

1. Index numbers are useful for measuring relative changes in a set of items.

2. Index numbers provide a good basis for comparison because they are expressed in abstract unit distinct from the unit of element.

3. Index numbers help in the formulation of appropriate policies for economic and commercial.

4. Index numbers are useful for measuring the phenomenon’s general trend.

5. Index numbers are used in deflating. They are used to adjust the original data for price changes or to adjust wages for cost of living changes.

6. The utility of index numbers has increased a great deal because of the method of splicing whereby the index prepared on any one base can be adjusted with reference to any other base.

7. As a measure of the average change in a group of elements the index numbers can be used for forecasting future events. A trend line indicates the trend for a group of commodities, while it gives the average rate of change in a single phenomena.

8. It is helpful in a study of the comparative purchasing power of money in different countries of the world.

9. Index numbers of business activities throw light on the economic progress made by various countries.

Read Also: Time Series in Statistics

Read Also: Definition of Statistics

Read Also: Introduction of Statistics

(Source – various books from the library)

• Tags: features of index number in statistics and importance of Index Numbers in Statistics

Copyrighted Material © 2019 - 2024 Prinsli.com - All rights reserved

All content on this website is copyrighted. It is prohibited to copy, publish or distribute the content and images of this website through any website, book, newspaper, software, videos, YouTube Channel or any other medium without written permission. You are not authorized to alter, obscure or remove any proprietary information, copyright or logo from this Website in any way. If any of these rules are violated, it will be strongly protested and legal action will be taken.