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Index numbers are used especially to compare business activity, the cost of living, and employment. They enable economists to reduce unwieldy business data into easily understood terms. In contrast to a cost-of-living index based on the true but unknown utility function, a superlative index number is an index number that can be calculated. [1]
The new measure, called a "superlative" index, is designed to be a closer approximation to a "cost-of-living" index than the other measures. The use of expenditure data for both a base period and the current period in order to average price change across item categories distinguishes the C-CPI-U from the existing CPI measures, which use only a ...
The Marshall-Edgeworth index, credited to Marshall (1887) and Edgeworth (1925), [11] is a weighted relative of current period to base period sets of prices. This index uses the arithmetic average of the current and based period quantities for weighting. It is considered a pseudo-superlative formula and is symmetric. [12]
Level of measurement or scale of measure is a classification that describes the nature of information within the values assigned to variables. [1] Psychologist Stanley Smith Stevens developed the best-known classification with four levels, or scales, of measurement: nominal , ordinal , interval , and ratio .
In statistics and research design, an index is a composite statistic – a measure of changes in a representative group of individual data points, or in other words, a compound measure that aggregates multiple indicators. [1] [2] Indices – also known as indexes and composite indicators – summarize and rank specific observations. [2]
Composite measures measure complex concepts more adequately than single indicators, extend the range of scores available and are more efficient at handling multiple items. In addition to scales, there are two other types of composite measures. Indexes are similar to scales except multiple indicators of a variable are combined into a single ...
The item-total correlation approach is a way of identifying a group of questions whose responses can be combined into a single measure or scale. This is a simple approach that works by ensuring that, when considered across a whole population, responses to the questions in the group tend to vary together and, in particular, that responses to no individual question are poorly related to an ...
Though each chart uses the same data, the ratio scale chart presents a visual that accurately presents the data. In the above examples, the interval chart shows a magnified subsection of the ratio chart. A common example of this type of interval magnification is used in charting stocks. A chart may indicate severe price swings because the chart ...