Lec#3 SIMPLE AVERAGE INDEX NUMBER | UNWEIGHTED/SIMPLE INDEX NUMBERS | INDEX NUMBERS for B.Com & BBA
In this video you will learn SIMPLE / UNWEIGHTED AVERAGE INDEX NUMBER METHOD
INDEX NUMBER VIDEO TUTORIAL SERIES
LECTURE #3
Session Contents
1. What is SIMPLE AVERAGE INDEX NUMBER ?
2. PRICE INDEX NUMBER - ARITHMETIC MEAN or GEOMETRIC MEAN - WITH EXAMPLE PROBLEM
3. PRICE INDEX NUMBER - GEOMETRIC MEAN - WITH EXAMPLE PROBLEM
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4. WHAT IS SIMPLE / UNWEIGHTED INDEX NUMBER METHOD
• Video
5. WHAT IS SIMPLE AGGREGATE INDEX NUMBER?
• Video
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1. What is SIMPLE AVERAGE INDEX NUMBER ?
Under this method, the price of each item in the current year is expressed as a percentage of its price in the base year.
The figure so obtain is called PRICE RELATIVE (P).
The Price Relative are then averaged to calculate the index number for that year.
Either ARITHMETIC MEAN or GEOMETRIC MEAN can be used for calculation of average of price relatives.
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2. PRICE INDEX NUMBER - ARITHMETIC MEAN or GEOMETRIC MEAN - WITH EXAMPLE PROBLEM
If ARITHMETIC MEAN is used for the purpose of averaging then the price relatives, then
Price relative for each item : P = (P1/P0)x100
Simple average of Price relatives to obtain the index number P0.1 is given by: P01 = Σ[(P1/P0)x100] / N
Where N = No. of Items.
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3. PRICE INDEX NUMBER - GEOMETRIC MEAN - WITH EXAMPLE PROBLEM
If GEOMETRIC MEAN is used for the purpose of averaging then the price relatives, then
Price relative for each item : P = (P1/P0)x100
Find Log(P)
Simple average of Logarithm values obtain by
Σ[ Log(P) ] / N
Calculate Anti-log of value to obtain the index number P0.1 is given by:
P01 = AntiLog( Σ[ Log(P) ] / N )
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