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The types of index numbers are Value index number, Quantity index number, and Price index number.

In general, construction of index number is further available for the division in two parts: Simple and Weighted. Furthermore, the simple method is classified into simple aggregative and simple relative. Similarly, the weighted method is classified into weighted aggregative and weighted average or relative.

There are broadly three types of index numbers – price index numbers, value index numbers, and quantity index numbers.

In constructing an index number, the following steps should be noted: Purpose of the Index Number: Selection of Commodities: Selection of Prices: Selection of an Average: Selection of Weights: Selection of the Base Period: Selection of Formula:

Index numbers measure a net or relative change in a variable or a group of variables. For example, if the price of a certain commodity rises from ₹10 in the year 2007 to ₹15 in the year 2017, the price index number will be 150 showing that there is a 50% increase in the prices over this period.

This tool has various types. A few popular ones are quantity, price, value, and special purpose. Moreover, individuals use different formulae to compute index numbers, for example, the simple aggregative method and the simple average of price relatives method. There are various uses of index numbers.

Simple index number again can be constructed either by – (i) Simple aggregate method, or by (ii) simple average of price relative's method. Similarly, weighted index number can be constructed either by (i) weighted aggregative method, or by (ii) weighted average of price relative's method.

Uses of Index Numbers. Practically, in all areas of economic activity, changes are measured using index numbers. It helps in recording changes in output, income, employment, business activities, productivity, etc.

The types of index numbers are Value index number, Quantity index number, and Price index number.

In general, construction of index number is further available for the division in two parts: Simple and Weighted. Furthermore, the simple method is classified into simple aggregative and simple relative. Similarly, the weighted method is classified into weighted aggregative and weighted average or relative.

There are broadly three types of index numbers – price index numbers, value index numbers, and quantity index numbers.

In constructing an index number, the following steps should be noted: Purpose of the Index Number: Selection of Commodities: Selection of Prices: Selection of an Average: Selection of Weights: Selection of the Base Period: Selection of Formula:

Index numbers measure a net or relative change in a variable or a group of variables. For example, if the price of a certain commodity rises from ₹10 in the year 2007 to ₹15 in the year 2017, the price index number will be 150 showing that there is a 50% increase in the prices over this period.

This tool has various types. A few popular ones are quantity, price, value, and special purpose. Moreover, individuals use different formulae to compute index numbers, for example, the simple aggregative method and the simple average of price relatives method. There are various uses of index numbers.

Simple index number again can be constructed either by – (i) Simple aggregate method, or by (ii) simple average of price relative's method. Similarly, weighted index number can be constructed either by (i) weighted aggregative method, or by (ii) weighted average of price relative's method.