एक्सप्लेन द फीचर्स ऑफ इंडेक्स नंबर
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Answer:
The following are the main features of index numbers:
(i) Index numbers are a special type of average. Whereas mean, median and mode measure the absolute
changes and are used to compare only those series which are expressed in the same units, the technique of
index numbers is used to measure the relative changes in the level of a phenomenon where the measurement
of absolute change is not possible and the series are expressed in different types of items.
(ii) Index numbers are meant to study the changes in the effects of such factors which cannot be measured
directly. For example, the general price level is an imaginary concept and is not capable of direct
measurement. But, through the technique of index numbers, it is possible to have an idea of relative changes
in the general level of prices by measuring relative changes in the price level of different commodities.
(iii) The technique of index numbers measures changes in one variable or group of related variables. For
example, one variable can be the price of wheat, and group of variables can be the price of sugar, the price
of milk and the price of rice.
(iv) The technique of index numbers is used to compare the levels of a phenomenon on a certain date with
its level on some previous date (e.g., the price level in 1980 as compared to that in 1960 taken as the base
year) or the levels of a phenomenon at different places on the same date (e.g., the price level in India in
1980 in comparison with that in other countries in 1980).
Explanation:
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